Which of the Following Statements Regarding Black Markets Is True

question 22

Multiple Choice

Which of the following statements regarding black markets is true?

• A) The reliability of products sold in black markets is generally higher than the reliability of products sold in legal markets.
• B) The prices of goods in black markets are generally lower than the prices of similar products in legal markets.
• C) The laws of supply and demand do not affect the prices of goods exchanged in black markets.
• D) The rate of violence is higher in black markets than in legal markets.

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Definitions:

Variable Rate Loans

Loans with interest rates that can fluctuate over time based on an underlying benchmark rate or index.

Tranches

Portions or slices of debt or securities that are structured to divide risk or return in a way that is marketable to different investors.

Credit Risk

Credit risk refers to the possibility that a borrower will default on a loan by failing to make the necessary payments.

Seniority

The order of repayment in the event of a sale or bankruptcy, with higher seniority debts being repaid before those of lower seniority.