Which of the Following Is True of a Bank-Based System

question 13

Multiple Choice

Which of the following is true of a bank-based system?

• A)It is likely that poorly performing firms will be penalized through corporate takeovers.
• B)Managers may have longer investment horizons and be less willing to take risks.
• C)The ratio of the domestic deposits in banks to stock market size will be less than 1.
• D)Financial markets take on the role of the main financial intermediary in the system.

---

Definitions:

Group Interdependencies

The mutual reliance among members of a group, where each member's actions affect and are affected by the actions of other members.

Asymmetric

Lacking symmetry; in a social or scientific context, it often refers to relationships or interactions where power or information is unevenly distributed.

Hierarchical

Pertaining to a system or organization where entities are ranked one above the other according to status or authority.

Social Group

A collection of individuals who interact with each other, share similar characteristics, and collectively have a sense of unity or identity.