The Main Problem with Securitization Is That

question 49

Multiple Choice

The main problem with securitization is that

• A) governments are no longer able to repackage bank assets.
• B) securitized banks grow too large and create oligopolies.
• C) There is no problem. Governments can still get an accurate picture of global financial flows by simply examining bank balance sheets.
• D) governments are not able to monitor bank assets or to asses a bank's risk to the soundness of the international banking system.
• E) the bank assets are not marketable.

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Definitions:

Paasche Price Index

An economic indicator that measures the change over time in the cost of a fixed basket of consumer goods and services, using the current period as the base.

Doggerel

Verse or words that are poorly written or expressed, often characterized by clichés, sloppy meter, and a lack of seriousness or artistic depth.

Revealed Preference

A theory in economics that assumes individuals' preferences can be discerned by observing their purchasing habits and behaviors.

Utility Maximization

The process or strategy of choosing the combination of goods and services that maximizes the utility or satisfaction of a consumer, given their budget constraints.