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The Idea of a Bank Being 'Too Big to Fail

Question 18

Multiple Choice

The idea of a bank being 'too big to fail' means


A) it has such a large asset base that its risk of failure is eliminated.
B) banks become more risk seeking because they believe they will be rescued if they fail.
C) a lack of competition in financial markets which increases risk aversion.
D) a reduced likelihood of adverse selection in financial markets.

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