Regulators Attempt to Reduce the Riskiness of Banks' Asset Portfolios

question 50

Multiple Choice

Regulators attempt to reduce the riskiness of banks' asset portfolios by

• A)limiting the amount of loans in particular categories or to individual borrowers.
• B)encouraging banks to hold risky assets such as common stocks.
• C)establishing a minimum interest rate floor that banks can earn on certain assets.
• D)requiring collateral for all loans.

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Definitions:

Involuntary Transfer

A change in the ownership of an asset, property, or right without the consent of its owner, often due to legal actions or corporate issues.

Adverse Possession

A way of acquiring title to real property by occupying it in an open and hostile manner for a statutory period.

Quitclaim Deed

A legal instrument used to transfer interest in real property from one person or entity to another, without any warranty of title.

Warranty of Title

A guarantee in a sales contract that the seller has the legal right to transfer ownership and that there are no undisclosed liens or encumbrances on the property being sold.