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Dave Cook, a risk manager with Forest Investments, is examining the risk-taking implications for his bank from taking too little or too much risk. He knows banks need to take on an optimal amount of risk in order to maximize shareholder value while still satisfying regulator constraints. Which of the following statements most likely represents an outcome from taking on too little risk? If the bank takes on too little risk:
A
This action may increase the value of the bank.
B
This action may impair the bank's ability to provide safe and liquid investments to customers.
C
The bank may fail to capitalize on enough profitable opportunities, which may generate suboptimal returns.
D
The bank may become distressed, which could result in losses for counterparties in the