The DoddFrank Act requires large firms in the financial sector to:
A) hold more debt and less equity.
B) participate in deleveraging.
C) rely on high financial leverage.
D) increase their debttoequity ratio.

Question

The Dodd­Frank Act requires large firms in the financial sector to:
A) hold more debt and less equity.
B) participate in deleveraging.
C) rely on high financial leverage.
D) increase their debt­to­equity ratio.

Quizplus · Accepted Answer

The Dodd-Frank Act requires large firms in the financial sector to participate in deleveraging, which means reducing their debt-to-equity ratio by holding more equity and less debt. This is aimed at reducing the risk of financial instability and the need for taxpayer bailouts in the future. Therefore, choices A, C, and D are incorrect.

The Dodd­Frank Act Requires Large Firms in the Financial Sector

The DoddFrank Act Requires Large Firms in the Financial Sector