If a Bank Makes a Loan That Is in Compliance

question 186

Multiple Choice

If a bank makes a loan that is in compliance with Regulation U, what will be the status of the loan at its consummation?

• A) The loan will be in compliance until it is renewed, regardless of the reduction of the borrower's equity in the stock.
• B) The loan will be in compliance only if the value of the stock remains within the margin requirements.
• C) The loan will be in compliance unless the status of the stock changes (for example, margin or nonmargin)
• D) The loan will always be in compliance until its maturity, regardless of the reduction of the borrower's equity in the stock, provided there are no substitutions or withdrawals that adversely affect the loan value.

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Definitions:

Deinstitutionalization

The policy of moving people with mental or physical disabilities from large institutional settings into community-based care.

Mental Disorders

Conditions characterized by alterations in thinking, mood, or behavior associated with distress and/or impaired functioning.

Community-Based Facilities

Local centers or organizations that offer services and support to members of a community, often aimed at improving health, education, and welfare.

Family System

A theoretical framework in psychology that considers the family as an emotional unit interconnected and influencing individual behaviors and relationships.