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:

Heuristics

Mental shortcuts or rules of thumb that simplify decision-making processes.

Simple Thinking

The process of considering or reasoning in a straightforward or uncomplicated manner.

Solve Problems

To find solutions or answers to difficult situations or questions through analysis and applied strategies.

Concept

An abstract idea or a mental symbol that represents a specific thing, thought, or group of things, often defining how something is perceived or understood.