One Proposal for Discouraging Excessive Risk-Taking Is to Require "Skin

question 17

Multiple Choice

One proposal for discouraging excessive risk-taking is to require "skin in the game," which means that the financial institution must:

• A)be large enough to qualify for "too big to fail treatment."
• B)have sufficient collateral to receive loans from the Fed.
• C)hold some of the risky transactions themselves.
• D)be subject to Federal Reserve regulations.

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Definitions:

Primary Motivator

The main influence or drive behind a person's actions or behavior, often related to fulfilling basic needs or achieving personal goals.