Question: The primary difference between the payoff and the purchase and assumption methods of handling failed banks is A . that the FDIC guarantees all deposits

The primary difference between the

"payoff" and the

"purchase and

assumption" methods of handling failed banks is

.

that the FDIC guarantees all deposits when it uses the

"payoff" method.

.

that the FDIC guarantees all deposits when it uses the

"purchase and

assumption" method.

.

that the FDIC is more likely to use the purchase and assumption method for small institutions because it will be easier to find a purchaser for them compared to large institutions.

.

that the FDIC is more likely to use the

"payoff" method when the bank is large and it fears that depositor losses may spur business bankruptcies and other bank failures.

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