Regular Bank Examinations and Restrictions on Asset Holdings Help to Indirectly

question 60

Multiple Choice

Regular bank examinations and restrictions on asset holdings help to indirectly reduce the ________ problem because,given fewer opportunities to take on risk,risk-prone entrepreneurs will be discouraged from entering the banking industry.

• A)moral hazard
• B)adverse selection
• C)ex post shirking
• D)post-contractual opportunism

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Definitions:

Chan Buddhist

A tradition of Buddhism originating in China, emphasizing meditation, intuition, and sudden enlightenment, known in Japan as Zen Buddhism.

Song Emperors

Rulers of the Song Dynasty, which was a culturally rich and sophisticated period in China from 960 to 1279 CE.

Marquise of Dai

Refers to Lady Dai (Xin Zhui), a noblewoman during the Han Dynasty in China, whose well-preserved mummy and extravagant tomb were discovered in 1971.

Funeral Banner

A piece of cloth, often elaborately decorated, used in funeral ceremonies as part of the burial rites to signify honor or represent the deceased.