What Are Typical Reasons for Abnormal Deposit Drains

question 28

Multiple Choice

What are typical reasons for abnormal deposit drains?

• A)Concerns about an FI's solvency relative to other FIs.
• B)Failure of a related FI leading to heightened depositor concerns about the solvency of other FIs.
• C)Sudden changes in investor preferences regarding holding non-bank financial assets relative to deposits.
• D)All of the listed options are correct.

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Definitions:

Fair Value Option

The fair value option is an accounting choice that allows companies to record certain financial assets and liabilities at their fair market value to provide a more relevant measurement of their financial position.

Unrealized Gains

Increases in the value of an investment that have not been realized through a sale and thus are not reflected in the entity's income.

Goodwill

An intangible asset representing the excess value of a business beyond its physical assets and liabilities, often arising from brand reputation, customer relationships, or intellectual property.

Net Assets

The total assets of a company after deducting its total liabilities, representing the owners' equity in the company.