The Volcker Rule Restricts Excessive Risk Taking by Chartered Banks

question 38

Multiple Choice

The Volcker rule restricts excessive risk taking by chartered banks by:

• A) prohibiting banks from making certain kinds of speculative investments.
• B) increasing the amount of capital banks must hold.
• C) decreasing the deposit insurance coverage of depositors in commercial banks.
• D) limiting the compensation that bank executives can be paid.

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Definitions:

Oceanic Crust

The part of Earth's lithosphere that underlies the ocean basins, composed primarily of basalt and gabbro.

Magnetic Reversals

A phenomenon where Earth's magnetic field changes direction, with magnetic north and south poles swapping places.

Seafloor Spreading

A process occurring at mid-ocean ridges, where new oceanic crust is formed through volcanic activity and then gradually moves away from the ridge.

Youngest Oceanic Crust

The most recently formed areas of the ocean floor, typically found at mid-ocean ridges where tectonic plates are diverging and new crust is being created by volcanic activity.