Explain What Sudden Stops Are and Their Role During the Crisis

question 9

Essay

Explain what sudden stops are and their role during the crisis in 2008 and 2009.

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Definitions:

Watered Stock

Shares of a company that are issued at a value much greater than the assets of the company, leading to an inflation of the company's value on paper.

Fair Market Value

The price at which property would sell for on the open market between a willing buyer and a willing seller, both having reasonable knowledge of all relevant facts.

Corporate Opportunity

A business opportunity that a company must offer to its shareholders or members before taking it for personal gain.

Duty of Disclosure

The legal obligation to reveal all material facts or information relevant to a transaction or decision-making process.