Which of the following statements about mutual savings banks are TRUE? CIRCLE AL

Question

Which of the following statements about mutual savings banks are TRUE? CIRCLE ALL THAT APPLY. (10 pts) a. The mutual form of ownership accentuates the principal-agent problem that b. More capital is available, contributing to the safety of mutual savings banks c. In compariso exists in corporations. compared to other banking organizations mutual savings banks are more risk averse because the value of their ownership n to the managers of banks in corporate form, the managers of does not increase if the firm does well. Most mutual savings banks are federally chartered. d.

Explanation / Answer

In mutual savings banks the mutual form of ownership accentuate the principal-agent problem that exists in corporation. More capital is available in mutual savings bank, contribuating to the safety of mutual savings banks compared to other banking organization. In comparison to the manager of the bank in corporate form, the managers of the mutual savings banks are more risk averse.

So, the correct options are (a), (b) and (c).

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