The Primary Difference Between the "Payoff" and the "Purchase and Assumption

question 54

Multiple Choice

The primary difference between the "payoff" and the "purchase and assumption" methods of handling failed banks is that the FDIC

• A) guarantees all deposits, not just those under the $250,000 limit, when it uses the "payoff" method.
• B) guarantees all deposits, not just those under the $250,000 limit, when it uses the "purchase and assumption" method.
• C) is less likely to use the "payoff" method when the bank is large and it fears that depositor losses may spur business bankruptcies and other bank failures.
• D) does both A and B of the above.
• E) does both B and C of the above.

---

Definitions:

Transnational

Refers to entities, activities, or phenomena that cross or operate across national boundaries.

Company-level Committee

A body within an organization, typically made up of employees and management, meant to facilitate communication, address workplace issues, and sometimes participate in decision-making.

Information Rights

Legal rights to access and obtain certain information, which could pertain to government data, workplace policies, or consumer products.

Decision-making Authority

The power or right vested in a particular position or role within an organization to make decisions affecting its operations or directions.