1. One piece of federal legislation instituted the takeover(i.e., liquidation or shutting the institution down) by the FDIC of banks and S&L with low net worth (capital). The institution that were targeted were not yet insolvent (i.e., they still had positive capital) but the level of capital was low). In addition, this legislation created a system of capital zone for banks based on their risk-weighted assets. Banks with high capital were to have less scrutiny from regulators. The process described was implemented in the:

a) FDIC Improvement Act of 1991

b) Financial Service Modemization Act of 1999

c) Garn-St. Germain Act of 1982.

d) DIDMCA Act of 1980

2. Which of the following are needed to compute the beta of an individual security?

I. average return on the market for the period

II. standard deviation of the security and the market

III. returns on the security and the market for multiple time periods

IV. correlation of the security to the market

II and IV only

I and III only

I, II, and III only

II and III only

I and IV only