the economics of money, banking, and financial markets

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41. 
    

    Banks will be examined at least once a year and given a CAMELS rating by examiners. The
    L stands for ____.
    A) liabilities
    B) liquidity
    C) loans
    D) leverage
    Answer: B
    Diff: 1 Type: MC Page Ref: 216
    Skill: Recall
    Objective List: 10.1 Explain bank regulation in the context of asymmetric information problems

    
    


42. 
    

    Bank examiners include ____.
    A) the Bank of Canada
    B) Canada Revenue Agency
    C) the OSC
    D) the Department of Finance
    Answer: A
    Diff: 1 Type: MC Page Ref: 216
    Skill: Recall
    Objective List: 10.1 Explain bank regulation in the context of asymmetric information problems

    
    


43. 
    

    Banks are required to file ____ usually quarterly that list information on the bank's
    assets and liabilities, income and dividends, and so forth.
    A) call reports
    B) balance reports
    C) regulatory sheets
    D) examiner updates
    Answer: A
    Diff: 1 Type: MC Page Ref: 216
    Skill: Recall
    Objective List: 10.1 Explain bank regulation in the context of asymmetric information problems

    
    


44. 
    

    Regular bank examinations and restrictions on asset holdings help to indirectly reduce the
    ____ problem because, given fewer opportunities to take on risk, risk-prone entrepreneurs
    will be discouraged from entering the banking industry.
    A) moral hazard
    B) adverse selection
    C) ex post shirking
    D) post-contractual opportunism
    Answer: B
    Diff: 1 Type: MC Page Ref: 216
    Skill: Recall
    Objective List: 10.1 Explain bank regulation in the context of asymmetric information problems