When a Person Whom a Regulatory Statute Seeks to Protect

question 47

Multiple Choice

When a person whom a regulatory statute seeks to protect enters into an agreement in violation of the statute, the protected person:

• A) is only allowed to enforce the agreement.
• B) cannot recover in quasi contract for benefits conferred on the other party.
• C) cannot recover for any loss but may enforce the agreement.
• D) may either enforce the contract or recover any consideration he or she has parted with.

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Definitions:

Required Reserves

The minimum amount of funds that a bank must hold in reserve against deposit liabilities, as mandated by central banking authorities.

Open Market Sale

The selling of government bonds to the public or banks by the central bank to control the money supply.

Discount Rate

The interest rate charged by central banks on loans offered to commercial banks or the rate used to discount future cash flows to present value.

Required Reserve Ratios

These are central bank regulations set on the minimum amount of reserves that commercial banks must hold against deposits.