- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 10. Economics of Regulation
- Subject 6. Regulatory Tools
CFA Practice Question
Capital adequacy requirements, set by regulators, ensure that financial institutions:
A. Operate without sufficient capital.
B. Face no consequences for insolvency.
C. Maintain sufficient capital to absorb potential losses.
D. Prioritize short-term profits over long-term stability.
Correct Answer: C
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