Which of the Following Is NOT a Reason for Using

question 27

Multiple Choice

Which of the following is NOT a reason for using a bad bank as a vehicle to add value in the loan sale process?

• A)Contracts for managers can be created to maximize the incentives to generate enhanced values from loan sales.
• B)The bad bank enables bad assets to be managed by loan workout specialists.
• C)The bad bank does not need to be concerned about liquidity needs since it does not have any deposits.
• D)Moving the bad loans off the balance sheet of the good bank will improve the markets perception, and thus performance, of the good bank.
• E)The good bank-bad bank structure increases information asymmetries regarding the value of the good bank's assets.

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Definitions:

Support Network

A group of individuals, including friends, family, and professionals, who provide emotional, informational, and practical aid.

Social Integration

The process by which individuals or groups are incorporated into a society, contributing to cohesion and a sense of belonging.

Social Support

The assistance and comfort provided by others, which can be emotional, practical, or informational, contributing to an individual's well-being.

Emotion-focused Approach

A coping mechanism that involves reducing the emotional impact of stress by engaging in activities that make one feel better, rather than directly addressing the problem.