Question #1
Reading: Reading 11 Analysis of Financial Institutions
PDF File: Reading 11 Analysis of Financial Institutions.pdf
Page: 1
Status: Incorrect
Correct Answer: A
Your Answer: C
Question
Which of the following statements is least likely correct? Financial institutions differ from other companies:
Answer Choices:
A. due to their activities giving rise to systemic risk
B. due to their balance sheet containing assets that are often measured at fair value
C. due to their assets being predominantly tangible
Explanation
Lots of companies have predominantly tangible assets. Financial institutions differ in that
their assets are predominantly financial assets. These are often measured at fair value,
and financial institutions do give rise to systemic risk.