Which of the Following Is True Only of a Consolidation

question 26

Multiple Choice

Which of the following is true only of a consolidation?

• A) More than two firms are involved in the combination
• B) One party to the combination disappears
• C) All parties to the combination disappear
• D) The entity resulting from the combination assumes ownership of the assets and liabilities of the acquiring firm only.
• E) One company becomes a wholly owned subsidiary of the other.

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Definitions:

Bank Leverage

The ratio of a bank's total debt to its equity capital, indicating the extent to which bank funding is used to finance its assets.

Bank Insolvency

A condition where a financial institution's liabilities exceed its assets, rendering it incapable of meeting its obligations.

Required Reserve Ratio

The fraction of deposits that banks are required to keep on hand as reserves, either in their vaults or on deposit at a central bank.

Money Supply

The aggregate of all financial assets available within an economy, encompassing various forms of money like bank notes, coins, and balance in bank accounts.