Multiple Choice
Consider the following two FIs: Company A has $500 million in total assets and total costs equal to $200 million.Company B has $60 million in total assets and total costs equal to $24 million.
Assume a third FI (company C) operates in the same market with two FIs,and it has $800 million in assets and total costs of $420 million.What can you conclude about the cost structure of the FIs in this market?
A) There are significant economies of scale because companies A,B,and C coexist in the industry.
B) There are no significant economies of scale because both companies A and C are much larger than company B
C) There are no significant economies of scale because the unit costs are constant.
D) There are significant economies of scale beyond the $500 million asset size.
E) There are no significant economies of scale because the unit costs increase as size increases.
Correct Answer:
Verified
Correct Answer:
Verified
Q10: What is float?<br>A)Overnight payments via CHIPS or
Q11: Which of the following is a centralized
Q12: The following information is available on the
Q14: A new computer system is expected to
Q16: The expenses relating to increased technological improvements
Q19: How can noninterest operating income of an
Q20: In 2014,the dollar value of all worldwide
Q57: Compared to the United States, the use
Q93: An increase in the cost of the
Q94: Fedwire is a wire transfer network operated