Question one: A- State the principle reasons for government regulation of financial firms. B- What are the main Pros and Cons of strict Rules? C- State the arguments of George Stigler , Samuel Peltzman and Edward Kane about strict rules or government regulation Question two: A- Central bank of Bahrain (CBB) employs three different instruments for managing monetary policy. Explain B- Why monetary policy in Bahrain is centered on the Exchange Rate? C- Why foreign reserve management is very important to Bahrain Economy? D- What is the Deposits & Unrestricted Investment Accounts Protection Scheme that adopted by CBB since 2011? E- What are the difference between Al Salam Sukuk, Government Development Bonds and Treasury Bills as that issued by CBB. Problem 1: Find the optimal solution using the graphical method: Max 4x + 5x2 Subject to: X 26 3x1 + x2 > 8 X1,X2 20