Under the purchase-and-assumption method, the FDIC usually finds it:
A)Can sell the failed bank for more than the bank is actually worth
B)Can sell the bank at a price equaling the value of the failed banks assets
C)Has to sell the bank at a negative price since the bank is insolvent
D)Cannot sell the bank and almost always has to revert to the payoff method for dealing with a failed bank

Question

Quizplus · Accepted Answer

Under the purchase-and-assumption method, the FDIC often sells the bank at a negative price because the bank is insolvent, meaning its liabilities exceed its assets. The FDIC may need to provide financial assistance to make the deal attractive to a buyer.

Under the Purchase-And-Assumption Method, the FDIC Usually Finds It