Due to the Existence of the FDIC, Banks

question 377

Multiple Choice

Due to the existence of the FDIC, banks

• A) may make riskier loans knowing that their depositors are insured.
• B) have not changed their behavior even with the existence of insurance.
• C) become more cautious in making loans.
• D) are no longer concerned about net worth.

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Definitions:

No-fault Insurance

A type of auto insurance policy where insureds are indemnified for losses by their own insurance company, regardless of fault in the incident.

Medical Expenses

Medical expenses refer to the costs incurred for healthcare services, including doctor visits, hospital stays, medications, and procedures, which can be covered by insurance or out-of-pocket payments.

Low-risk Driver

A motorist considered less likely to file an insurance claim based on factors like driving history, thereby often enjoying lower insurance premiums.

Insurance Premiums

Regular payments made to an insurance company in exchange for coverage.