The Important Feature of the Credit Default Swaps (CDS) That

question 38

Multiple Choice

The important feature of the credit default swaps (CDS) that caused financial losses at American International Group (AIG) in 2008 was that the CDS required AIG to make payments when:

• A)houses financed by mortgage-backed securities went into foreclosure.
• B)prices of mortgage-backed securities fell.
• C)prices of mortgage-backed securities rose.
• D)issuers of mortgage-backed securities defaulted.

Analyze the impact of sales, costs, and invested assets on business profitability and efficiency.

Understand the role of income from operations in financial analysis.

Understand the components and calculations involved in the DuPont formula for ROI.

Identify and differentiate between the measures for evaluating and controlling investment center performance.

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Definitions:

Catabolism

The metabolic process that breaks down molecules into smaller units to release energy.

Phosphorylate

The process of introducing a phosphate group into an organic molecule, often to activate or deactivate proteins and enzymes in cells.

ADP

Short for Adenosine Diphosphate, it is a nucleotide involved in energy transfer within cells.

Nutrients

Essential substances that organisms must obtain from their diet to maintain healthy growth and bodily functions.