Which of the Following Expresses the Effect of the D'Oench,Duhme

question 42

Multiple Choice

Which of the following expresses the effect of the D'Oench,Duhme doctrine in relation to federally insured banks?

• A) It makes it more difficult for federal agencies to bring criminal charges against bank officials who negligently,but not intentionally,made bad loans.
• B) It makes it easier for federal agencies to bring criminal charges against bank officials who negligently,but not intentionally,made bad loans.
• C) It makes it more difficult for federal agencies to collect on outstanding loans by specifically providing that an oral loan commitment is enforceable so long as at least two bank officials confirm the existence of the oral agreement and there is no indication that the debtor involved acted in an illegal manner.
• D) It makes it easier for federal agencies to collect on outstanding loans by barring enforcement of any agreements unless the agreements are in writing and approved contemporaneously by the bank's board or loan committee and recorded in the bank's written records.

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Definitions:

Constant Growth Model

A model for valuing a stock by assuming it will pay dividends that grow at a constant rate indefinitely.

Dividend Yield

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

Expected Return

A synonym for Expected Rate of Return, signifying the profit or loss investors anticipate from an investment, commonly shown as a percentage.

Required Return

The minimum expected return an investor demands for a specific investment, considering the risk associated with it.