Which statement is TRUE?

A. In a commercial bank the money comes from investments, while in an investment bank, the money comes from depositors.

B. If investors begin to doubt the solvency of an investment bank, it may lead the short-term loans to disappear more quickly because they are rolled over on a very frequent basis.

C. The shadow banking system includes only investment banks.

D. The investments of investment banks are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.

Question

Business

Roselyn Skinner

1 May, 13:34

Which statement is TRUE?

A. In a commercial bank the money comes from investments, while in an investment bank, the money comes from depositors.

B. If investors begin to doubt the solvency of an investment bank, it may lead the short-term loans to disappear more quickly because they are rolled over on a very frequent basis.

C. The shadow banking system includes only investment banks.

D. The investments of investment banks are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.

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Answers (1)

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Alexzander Key · Answer 1

(B) If investors begin to doubt the solvency of an investment bank, it may lead the short-term loans to disappear more quickly because they are rolled over on a widespread basis is a TRUE statement.

Explanation:

Solvency is the capacity of an organization to meet its extended haul obligations and money related commitments. Dissolvability is fundamental to remaining in business as it shows an organization's ability to proceed with activities into the not so distant.

Solvency relates directly to the capacity of an individual or business to pay their extended haul obligations, including any related intrigue. To be viewed as dissolvable, the estimation of a substance's advantages, regardless of whether about an organization or an individual, must be more prominent than the total of its obligation commitments.