Before 2010 and Passage of Dodd-Frank, Shadow Banks Offered Their

Multiple Choice

Before 2010 and passage of Dodd-Frank, shadow banks offered their customers a higher rate of return than commercial banks because shadow banks _____, but commercial banks _____.

A) could pay interest on deposits; could not.
B) were allowed to invest in stocks of foreign corporations; could invest only in stocks of U.S. corporations.
C) had to hold a large amount of reserves and capital; were not required to keep as much in reserve
D) were not subject to reserve and capital requirements; had to hold reserves and meet capital requirements