Consider a failing bank. How much is a deposit of $300,000 if the CDIC uses the payoff method? The purchase-and-assumption method? Which method is more costly to taxpayers? CHILD Using the payoff method, the $300.000 deposit is worth $. (Round to the nearest dollar) Using the purchase-and-assumption method, a deposit of $300,000 is worth $. (Round to the nearest dollar) Which method is more costly to taxpayers? Select the best answer: OA. The payoff method is more costly, since taxpayers will only pay $0.10 on the dollar. OB. The purchase and assumption method is more costly, because depositors receive the full value of their deposits OC. The purchase and assumption method is more costly, because depositors will refuse to keep account balances in excess of $100,000 in a single bank. OD. The payoff method is more costly, since the cost to insure the fund will be lower.
Consider a failing bank. How much is a deposit of $300,000 if the CDIC uses the payoff method? The purchase-and-assumption method? Which method is more costly to taxpayers? CHILD Using the payoff method, the $300.000 deposit is worth $. (Round to the nearest dollar) Using the purchase-and-assumption method, a deposit of $300,000 is worth $. (Round to the nearest dollar) Which method is more costly to taxpayers? Select the best answer: OA. The payoff method is more costly, since taxpayers will only pay $0.10 on the dollar. OB. The purchase and assumption method is more costly, because depositors receive the full value of their deposits OC. The purchase and assumption method is more costly, because depositors will refuse to keep account balances in excess of $100,000 in a single bank. OD. The payoff method is more costly, since the cost to insure the fund will be lower.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Consider a falling bank. How much is a deposit of $300,000 if the CDIC uses the payoff method? The purchase-and-assumption method? Which method is more costly to taxpayers?
CHO
Using the payoff method, the $300,000 deposit is worth $. (Round to the nearest dollar)
Using the purchase-and-assumption method, a deposit of $300,000 is worth $. (Round to the nearest dollar)
Which method is more costly to taxpayers?
Select the best answer:
A. The payoff method is more costly, since taxpayers will only pay $0.10 on the dollar.
OB. The purchase and assumption method is more costly, because depositors receive the full value of their deposits.
OC. The purchase and assumption method is more costly, because depositors will refuse to keep account balances in excess of $100,000 in a single bank.
D. The payoff method is more costly, since the cost to insure the fund will be lower.
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