The Contagion Effect

question 20

Multiple Choice

The contagion effect

• A)stems from the positive correlation in FI returns.
• B)results when interest rate risk increases credit risk and liquidity risk exposures.
• C)occurs when liquidity risk problems at bad banks damages well-run banks.
• D)occurs when a computer virus infects the computerized electronics payments systems Fedwire and CHIPS.
• E)is completely eliminated by government provided deposit insurance against bank runs.

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Definitions:

Personality Development

The growth and development of the aspects of a person that involve their character and personality traits over time.

Oedipus Complex

A concept in psychoanalytic theory describing a child's feelings of desire for the opposite-sex parent and jealousy and rivalry toward the same-sex parent.

Same-sex Parent

A parent who identifies as having a sexual orientation that is attracted to individuals of the same sex.

Phallic Stage

In Freudian psychoanalysis, a stage of psychosexual development where a child's focus of libido is concentrated in the genital area.