The Widely Publicized Subprime Lending Crisis Was Not Caused by

question 29

Multiple Choice

The widely publicized subprime lending crisis was not caused by

• A)Capital market participants who acted in their own self-interest.
• B)A lack of transparency.
• C)A lack of investor understanding of the investment's true risk.
• D)The practice of securitizing assets.

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Definitions:

Indirect Method

A method for preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to reconcile to cash provided by operating activities.

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits distributed in cash.

Long-Term Investments

Assets that a company intends to hold for more than one year, typically including stocks, bonds, or real estate.

Bonds Retired

The act of paying off or buying back issued bonds before their maturity date.