M: Business 3rd Edition by O. C. Ferrell, Geoffrey Hirt, Linda Ferrell

Exercise 85

When discussing financial institutions, what is a shrinking capital base?

A. When an institution’s credit rating is downgraded

B. When the institution gives out a lot of large loans

C. When the institution experiences a large influx of new equity

D. When the amount of debt in relation to equity increases

E. When the institution loses a large quantity of its customers in a short amount of time