SIE Knowledge of Capital Markets Practice Question 22

Correct Answer: B

Explanation:

B: Choice B is correct and that led to the formation of the FDIC to help assure bank customers that they could have confidence in their bank deposits up to a stated limit. Choice A is incorrect because many banks were not able to satisfy depositors' requests for withdrawals of their account balances. Choice C is incorrect because the Federal Reserve was also established to moderate the fractional reserve rate to encourage or discourage banks from making loans, which affects the money supply. Choice D is incorrect because in the late nineteenth century many banks were unable to satisfy their customers' request to withdraw funds.