4 Which of the following are regulations that are designed to reduce the moral hazard created by deposit insurance?Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once toplace a check mark. For incorrect answer(s), click the option twice to empty the box.O Regulators can restrict competition so that banks are not under as much pressure to engage in risky investments.DU.S. banks cannot make loans to single borrowers that exceed 50 percent of their capital.DU.S. banks are not allowed to hold any common stock or bonds.O U.S. banks' bond holdings from a single issuer cannot exceed a certain percent of their capital.O Regulators can prohibit banks from making certain types of risky loans and from purchasing particular securities.

Moral hazards are present in the systems of deposit insurance. In a system with no deposit…

Answered: Which of the following are regulations…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 6TP: When a customer is delinquent on paying a notes receivable, your company has the option to continue...

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Suppose a bank offered to make loans to potential borrowers withoutchecking their credit history. What would be true of the types ofborrowers they would attract compered with banks that did checkcredit history. Would such a bank charge the same interest rateon loans as banks that check credit history? Explain those with areason in 4 lines.
Revolving lines of credit generally do not involve the use of credit cards and often offer borrowers more credit at lower interest rates than credit cards. Borrowers use checks to pay their bills, purchase goods and services, or even to take cash advances. Banks, brokerage houses, and other financial institutions offer open account credit to qualified borrowers. Revolving Credit Lines Overdraft protection is linked to your established overdraft provision can signal that you're You receive funds from an unsecured personal line of credit credit be in case you overdraw your account. It draws on a line of credit that is usually . You should use your overdraft provision . Frequent use of your going through the formality of setting up a new loan. It draws on a line of credit that can . Remember, even though acquiring the funds is as simple as writing a check, the funds still represent a loan. Payments are usually structured to be due Home equity lines of credit enable you to acquire cash…
Which of the following is not a reason for the Jones Hardware Store to accept credit cards from customers? Group of answer choices A)Jones can receive its money faster than if it directly extended credit to the customer by an account receivable. b)The credit card company offers a discount to Jones so that Jones will have more money available for operations. C)Jones will not have to be concerned with nonsufficient funds checks from customers. d)Jones will not have to have extra office workers to make phone calls to customers requesting collections on accounts. E)All these are reasons to accept credit cards.
Which of the following decreases the likelihood of bank failures by keeping banks from making risky loans? FDIC insurance The discount window Reserve requirements Capital requirements
Your company provides credit to customers. Someof these customers default on their loans, with verynegative implications for you. Describe how you coulduse discriminant analysis to learn what distinguishesthe customers who default on their loans from thosewho pay back their loans. How might you use such amodel?
True our False? 6. Under the mudarabah account, the depositors will always be guaranteed to get back their deposits. 7. Current, saving and investment accounts are designed to fulfil the motives of holding money. 8. The difference between hibah and interest (riba) is the former is determined ex-ante and the latter is ex-post. 9. Statutory reserve requirement is part of regulatory costs for Islamic deposit. 10. Islamic bank can offer the sale of foreign currency through murabahah financing.
When a customer is delinquent on paying a notes receivable, your company has the option to continue to attempt collection or sell the debt to a collection agency. Research the benefits and challenges with each of these options and in a short essay, answer the following questions. A. What are the benefits and challenges of continuing to attempt collection yourself? B. What are the benefits and challenges of selling debt to a collection agency? C. If you had a dishonored notes receivable, which option would you select and why? D. Would you weight certain benefits or challenges differently when making your selection? How?
Banks tend to focus their loans in one industry so that they can specialize on that industry and reduce the credit risk of their loan portfolio. Group of answer choices: True False
2. Substantial amount of credit losses is due to poor loan monitoring. In view of this, suggest how might one safeguard a bank's interest when providing loans.
The following is true of deposit insurance, except a Depositor no longer has incentives to monitor the activities of the bank b Moral hazard dissuades the bank manager from taking risky projects c In theory, regulators have replaced depositors in the monitoring of banks d Moral hazard encourages the bank manager to take on risky projects
A Letter of Credit (LC) is a document that guarantees the buyer's payment to the sellers. It is issued by a bank and ensures timely and full payment to the seller. If the buyer is unable to make such a payment, the bank covers the full or the remaining amount on behalf of the buyer. Why would the bank pay the remaining amount on behalf of the buyer, and what would be the risk exposed to the bank? Please explain thoroughly.
Suppose Beth comes into a large sum of money and decides to lend it out to earn interest on it. Because she lacks the expertise to evaluate the credit risks of potential borrowers, she decides to deposit the money in her local bank, a financial intermediary. This is an example of how financial intermediaries can help solve the problem of: Adverse selection Fractional reserve banking Insolvency O Time deposit

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