16-81 Settlement Risk Is Important Because

question 81

Multiple Choice

16-81 Settlement risk is important because

• A)of the interdependent nature of many international transactions.
• B)of the impact on sovereign country risk.
• C)problems may induce countries to limit the freedom of international capital flows.
• D)the electronic funds transfer network itself may become insolvent.
• E)the Fed's guarantee may prove to be even more costly to the Federal government than the thrift debacle.

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Definitions:

Conglomerate Merger

involves the combination of firms that operate in unrelated business areas, aiming for diversification and reduced business risk.

Distinct Industries

Different sectors of the economy that produce different types of goods or services, characterized by unique products, markets, and production processes.

Market Shares

The portion of a market controlled by a particular company or product.

Natural Monopoly

A natural monopoly occurs when a single firm can supply a market's entire demand for a good or service at a lower cost than any potential competitor, often due to high fixed or startup costs.