1.

Question 1
Why is AML necessary from a government viewpoint?
1 / 1 point
It prevents crime and fraud
It helps the government track illegal movement of money
It prevents people from avoiding taxes
All of the above
Correct
Good job!
2.
Question 2
If a bank has higher reserve requirements imposed by the government as opposed to lower reserve
requirements…
1 / 1 point
They will have significantly higher profits margins
They are more likely to fail and need to be bailed out
It will slow down economic development
They are less stringent on loan applicants
Correct
Good job!
3.
Question 3
One of the ways a government can regulate insurance companies to reduce risk to society and for
investors is by...
0 / 1 point
Requiring certain levels of capital reserves
Requiring insurance companies to share data with the government and banks
Adjusting the federal funds rate
All of the above
Incorrect
Please refer to video 2.5b, ~1:30.
4.
Question 4
One of the early key reasons that led to the financial crisis was…
1 / 1 point
The decrease in regulation of finance institutions in the 1970s-80s
The increasing amounts of foreign reserve bonds held by the US federal reserve
The development of computer technology and trading algorithms
The Y2K bug
Correct
Good job!
5.
Question 5
The packages of loans known as CDOs were…
1 / 1 point
Comprised of top tier home and auto loans
Sold to foreign governments to raise capital
A by-product of synthetic CDOs and credit default swaps (CDSs)
Not subject to reserve requirements
Correct
Good job!
6.
Question 6
Insurance firms decided to insure the CDOs of the banks because…
1 / 1 point
The US government demanded that they insure the investments
The investments were given very high ratings by rating agencies
Sufficient time had passed without any major incidents
The CDOs had no pre-existing conditions
Correct
Good job!
7.
Question 7
Physical cash is easier to regulate than bank accounts and digital cash.
1 / 1 point
True
False
Correct
Good job!
8.
Question 8
Consumer privacy laws vary heavily in different jurisdictions.
1 / 1 point
True
False