Regulators Attempt to Reduce the Riskiness of Banks' Asset Portfolios

question 28

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) prohibiting banks from holding risky assets such as common stocks.
• C) establishing a minimum interest rate floor that banks can earn on certain assets.
• D) doing all of the above.
• E) doing only A and B of the above.

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Definitions:

Chlorofluorocarbons

Chemical compounds that were widely used as refrigerants and aerosol propellants until they were found to deplete the ozone layer.

Ozone Layer

A layer in the Earth's stratosphere containing a high concentration of ozone, which absorbs most of the sun's ultraviolet radiation, protecting life on Earth.

Greenhouse Gases

Gases that trap heat in the atmosphere, contributing to global warming and climate change.

Resource Conservation

The practice of managing the use of natural resources wisely to ensure their sustainability and to protect the natural environment.