Policy Makers Are Particularly Concerned About the Financial Soundness of Financial

question 101

Multiple Choice

Policy makers are particularly concerned about the financial soundness of financial intermediaries because

• A)most financial assets are held by intermediaries.
• B)troubles of intermediaries always receive the most publicity in the media.
• C)the workings of intermediaries are easier for Congress to understand than are the workings of financial markets.
• D)federal law applies to intermediaries but does not currently apply to financial markets.

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Definitions:

Reactivity

The phenomenon where subjects alter their behavior due to their awareness of being observed.

Convergent Validity

A measure of the extent to which two independent measures of the same concept are correlated.

Ordinal Scale

A scale of measurement in which the measurement categories form a rank order along a continuum.

Unobtrusive Measure

Research methods that do not involve direct interaction with the participants, minimizing the influence of the measurement process on the results.