Of the Following Methods That Banks Might Use to Reduce

question 85

Multiple Choice

Of the following methods that banks might use to reduce moral hazard problems,the one not legally permitted in the United States is the

• A)requirement that firms keep compensating balances at the banks from which they obtain their loans.
• B)requirement that firms place on their board of directors an officer from the bank.
• C)inclusion of restrictive covenants in loan contracts.
• D)requirement that individuals provide detailed credit histories to bank loan officers.

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Definitions:

Blind Date

A social engagement or meeting between two people who have not previously met, arranged with the hope of forming a romantic relationship.

Attractiveness

A quality that makes a person, place, or thing pleasing or appealing to the senses, especially sight.

Second Date

A follow-up social or romantic encounter that happens after two individuals have met and spent time together once.

Waist-To-Hip Ratio

A measure used in physical attractiveness studies, indicating the ratio of the circumference of the waist to that of the hips.