In One Sense ________ Appears Surprising Since It Means That

question 102

Multiple Choice

In one sense ________ appears surprising since it means that the bank is not ________ its portfolio of loans and thus is exposing itself to more risk.

• A)specialization in lending;diversifying
• B)specialization in lending;rationing
• C)credit rationing;diversifying
• D)screening;rationing

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Definitions:

Common Stock

Represents the shares of a company that are owned by its shareholders, which entitle them to vote at shareholder meetings and to receive dividends.

Dividends

Payments made by a corporation to its shareholder members, distributing profits.

Treasury Stock

Shares that were once part of the outstanding shares and have been bought back by the company, reducing the amount of outstanding stock on the open market.

Paid-In Capital

Funds raised by a company through the issuance of common or preferred stock, representing the capital contributed by shareholders in exchange for shares.