Define capital requirement

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The Federal Reserve stated last year (late 2017) that banks have passed their "stress test" thus loosening the "capital requirements" they must have to prevent "insolvency". Several banks announced they would begin "buying back their shares" and BofA and Chase would not only buyback shares, but increased the amount they would pay in "dividends"

-What's a "stress test" and how might it prevent "insolvency"?

-Define "capital requirement" as it pertains to banks. What's a share "buy back"?

-Define "dividend"

-If a bank buys back its stock, what should happen to the price of its outstanding shares and how does this relate to a "shifting of the supply curve" -assuming bank stock represent the supply of shares outstanding.

Reference no: EM132639973

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