Which of the Following Is Not a Reason Financial Regulation

question 31

Multiple Choice

Which of the following is not a reason financial regulation and supervision is difficult in real life?

• A) Financial institutions have strong incentives to avoid existing regulations.
• B) Unintended consequences may happen if details in the regulations are not precise.
• C) Regulated firms lobby politicians to lean on regulators to ease the rules.
• D) Financial institutions are not required to follow the rules.

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Definitions:

Missing Value

The unavailability or lack of specific information that is expected to be in a dataset, record, or analytical equation.

Promissory Note

A legal document in which the writer promises to pay a specified sum of money to a designated party at a future date or on demand.

Simple Interest

A method to calculate the interest charged on a loan, based on the original principal amount, the rate of interest per period, and the number of time periods.

Discounted

Refers to the process of determining the present value of a future amount of money or stream of payments, considering a specific interest rate.