Multiple choice question

7) When a $10 check written on the First National Bank is deposited in an account at the Second National Bank, then A) the liabilities of the First National Bank decrease by $10. B) the reserves of the First National Bank increase by $10. C) the liabilities of the Second National Bank decrease by $10. D) the assets of Second National Bank decrease by $10. 8) Banks can protect themselves from the disruption caused by deposit outflows by A) holding excess reserves. B) selling securities. C) "calling in" loans. D) doing all of the above. 9) In the case of an insurance policy, occurs when the existence of insurance encourages the insured party to take risks that increase the likelihood of an insurance payoff. A) moral hazard B) opportunism C) adverse selection D) shirking 10) By law, investors must be given a portion of the registration statement before they can invest in a new security. This document is called a A) prospectus. B) proxy statement. C) fiduciary warrant D) debenture