The risk$-$based capital requirements are higher for banks that conduct more off$$balance sheet activities. In this way, regulators discourage banks from excessive involvement in such activities.

False

True

Question $6$

The function of institutional venture capital firms is to

none of the options is correct.

find and fund the most promising new firms.

lend funds to established companies that are faltering.

take equity positions in successful established companies.

lend funds on a long$-$term basis to promising new companies with no track record.

Question $7$

Creating a secondary market in an asset by a securities firm involves the function of

investment banking.

investing.

trading.

market making.

cash management.