Which of the Following Statements Is True

question 31

Multiple Choice

Which of the following statements is true?

• A)In Australia, depositors received preference over other liability holders in the event of a liquidation of an FI.
• B)In Australia, depositors receive preference over other liability holders in the event of a liquidation of an FI being replaced by a financial claims scheme to protect deposit accounts.
• C)In Australia, only customers of the major banks are covered by deposit insurance.
• D)Australia has had a well-developed deposit insurance system for decades that has protected depositors without a bank failure for over a century.

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Definitions:

Exchange Rate

Specifies the number of units of a given currency that can be purchased for one unit of another currency.

Exchange Rate Risk

Exchange rate risk, or currency risk, refers to the potential for loss due to fluctuations in the foreign exchange rate between two currencies.

Political Risk

The risk of losing money due to changes in a country's political landscape or government policies that negatively affect investments.

International Diversification

The strategy of spreading investment risk by purchasing assets in various countries, aiming to reduce overall investment risk.