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8. Banks may use various methods to reduce moral hazard problems. Which one of the following is not legally permitted in Canada? ____ A) The

8. Banks may use various methods to reduce moral hazard problems. Which one of the following is not legally permitted in Canada? ____

A) The inclusion of restrictive covenants in loan contracts

B) The requirement of keeping compensating balances at the banks from which customers obtain their loans

C) The appointment of a bank officer on the board of directors of the borrowing corporations

D) The disclosure of detailed credit histories to bank loan officers

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