Economies of Scale Refer to an FI's Ability to

question 65

Multiple Choice

Economies of scale refer to an FI's ability to

• A)lower its average costs of operations by expanding its output of financial services.
• B)generate cost synergies by producing more than one output with the same inputs.
• C)understand each risk and its interaction with other risks.
• D)finance its assets completely with borrowed funds.
• E)moderate the long-tailed downside risk of the return distribution.

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Definitions:

Compensation Rates

The amount of pay or benefits that an employee receives from their employer for their work.

Internal Equity

The practice of ensuring that employees are compensated fairly in relation to one another within the same organization.

External Equity

The fairness of an employee's compensation as compared to what others in the external job market are receiving for similar work.