Which of the following is a way banks reduce risk?
a) Screening firms.
b) Evaluating firms.
c) Monitoring firms.
d) Pooling money into portfolios.
Ans: d) Pooling money into portfolios.
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What is scarcity, and why is it a fundamental concept in economics?
What will be an ideal response?
The restriction or prohibition of trade in order to put political pressure on a country is:
A. a tariff. B. unfair practice. C. a source of quota rent. D. an embargo.
When the price of a good falls, consumers buy more of the good because it is cheaper relative to competing goods. This statement describes the
a. consumer equilibrium effect. b. price effect. c. income effect. d. substitution effect.
If income elasticity of demand for food is 1.55 it follows that
A) a 10 percent rise in the price of food lowers the quantity demanded of food by 15.5 percent. B) if income rises by 10 percent, consumption of food rises by 15.5 percent. C) if income rises by 10 percent, consumption of food falls by 15.5 percent. D) a 1 percent rise in the price of food decreases the quantity demanded of food by 1.55 percent. E) none of the above