A Shadow Bank Engages in Maturity Transformation By

question 102

Multiple Choice

A shadow bank engages in maturity transformation by:

• A)accepting short-term deposits and making short-term loans.
• B)accepting long-term deposits and making long-term loans.
• C)borrowing short term and lending or investing long term.
• D)borrowing long term and lending or investing short term.

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Definitions:

Model Business Corporation Act

A model set of laws prepared by legal experts to guide states in developing their corporate statutes.

Preincorporation Subscription

An agreement by an individual to purchase shares in a corporation that has yet to be formed.

Six-Month

Relating to or denoting a period or term of six months, often used in the context of time-specific agreements or conditions.

Debentures

A type of debt instrument not secured by physical assets or collateral but backed only by the general creditworthiness and reputation of the issuer.