20-76 Each of the Following Is a Function of Capital

question 26

Multiple Choice

20-76 Each of the following is a function of capital EXCEPT

• A)funding the branch and other real investments to provide financial services.
• B)protecting the insurance fund and the taxpayers.
• C)assuring the highest possible return on equity for the shareholders.
• D)protecting uninsured depositors in the event of insolvency and liquidation.
• E)absorbing losses in a manner that allows the FI to continue as a going concern.

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Definitions:

Law Of Supply

The principle that, all else equal, an increase in the price of goods will lead to an increase in the quantity supplied.

Good

An item or service that satisfies human wants and provides utility, which can be transferred or sold.

Sellers

Individuals or entities that offer goods or services in exchange for monetary or other forms of compensation.

Producer Surplus

Producer surplus is an economic measure of the difference between the amount a producer is paid for a good compared to the minimum amount they would accept to produce that good.