The Following Questions Apply to the Following Simplified Bank Balance

question 15

Multiple Choice

The following questions apply to the following simplified bank balance sheet

-The Bank above suffers a 5% fall in the value of its loans.It is now

• A) in a position where none of its creditors will get any of their money back
• B) effectively bankrupt and depositors stand to lose money
• C) effectively bankrupt but depositors can be paid off
• D) effectively bankrupt but depositors and subordinated debt holders can be paid off
• E) still a viable enterprise but with dramatically reduced capital

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Definitions:

Fast-Second Strategy

A business strategy where a company quickly follows pioneers into a new market or technology with the aim to surpass them.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity produced.

Legal Protection

Measures and regulations implemented by governments or organizations to safeguard the rights and properties of individuals, companies, or other entities.

Pure Competitors

Firms operating in a market where products are identical, and there are no barriers to entry, leading to many sellers and buyers.