Which of the Following Measures the Difference Between the Private

question 46

Multiple Choice

Which of the following measures the difference between the private costs of regulations and the private benefits of those regulations for the producers of financial services?

• A)Capital adequacy.
• B)Agency costs.
• C)Net regulatory burden.
• D)Charter value.
• E)Liquidity risk.

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Definitions:

Forward Exchange Rate

The agreed-upon exchange rate for currencies to be exchanged on a specified future date.

Swaps

Financial derivatives contracts where two parties agree to exchange one stream of cash flows for another, often used to manage risk or speculate.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Currencies

Systems of money in common use, particularly for people in a nation.