Chapter 1

Question 1

financial instruments transfer resources from

Answer 1

savers to investors and to transfer risk to those who are best equipped to bear it.

Question 2

Financial supervision

Answer 2

refers to the oversight necessary to enforce these rules

Question 3

financial regulation.

Answer 3

Rules for the operation of financial institutions and markets

Question 4

dodd- frank act

Answer 4

Major financial reform signed into law in July 2010 as the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Question 5

basel 3

Answer 5

The 2011 version of the Basel Accord on the regulation of internationally active banks.

Question 6

Government agencies create rules to _____ the financial system and _____ the system to make sure these rules are followed.

Answer 6

regulate, supervise