Which of the Following Transactions Is Subject to the Provisions

question 395

Multiple Choice

Which of the following transactions is subject to the provisions of Regulation O?

• A) Time deposit account held by a director
• B) Travel advance to an executive officer outstanding for less than 30 days
• C) Extension of credit to a director of an unaffiliated, competing, noncorrespondent bank
• D) Extension of credit to a member of the bank's board of directors

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Definitions:

Compounded Annually

An interest calculation method where interest is added to the principal once a year, affecting the calculation of future interest.

Compounded Monthly

An interest calculation method where interest is added to the principal balance monthly, causing the total amount of interest to grow at an increasing rate.

Compounded Annually

The method of calculating interest where the total interest is added to the principal once per year, resulting in interest earning interest annually.

Perpetuity

A type of annuity that pays a fixed sum of money to an individual indefinitely.