Regulators generally prohibit banks from purchasing ____________ for income purposes.
A) Treasury bills
B) commercial paper
C) common stock
D) repurchase agreements
E) bankers' acceptances

Question

Quizplus · Accepted Answer

Regulators prohibit banks from purchasing common stock for income purposes because it poses a higher degree of risk than other investment options. Banks are typically only allowed to own common stock if they acquire it through a borrower's default on a loan or as part of a debt restructuring agreement.

Regulators Generally Prohibit Banks from Purchasing ____________ for Income Purposes