Asked by Nachelle Culpepper on May 06, 2024
Verified
Deposit insurance shifts most of the financial risk of bank failures from the depositors to
A) the bank's creditors
B) the bank's stockholders
C) the borrowers
D) the federal agency.
Deposit Insurance
A protection scheme for bank depositors that guarantees the safety of deposited funds up to a certain limit in the event of a bank failure.
Financial Risk
The possibility of losing money on an investment or business venture.
- Gain insight into the responsibilities of the Federal Reserve and the tools it uses for policy implementation.
Verified Answer
CS
Cynthia SanchezMay 09, 2024
Final Answer :
D
Explanation :
Deposit insurance, typically provided by a federal agency, protects depositors by covering the cost of deposits up to a certain limit in the event of a bank failure, thereby shifting most of the financial risk from the depositors to the federal agency.
Learning Objectives
- Gain insight into the responsibilities of the Federal Reserve and the tools it uses for policy implementation.