The Fed Loaned Money to J

question 3

Multiple Choice

The Fed loaned money to J.P.Morgan and AIG because it was concerned about:

• A) moral hazard on the part of these banks.
• B) systemic risk,should these banks fail.
• C) the liquidity of these banks.
• D) the market demands being placed on these banks.

---

Definitions:

Alimony

Monetary payments by one ex-spouse to the other after a divorce (sometimes called spousal maintenance).

Psychic

A person who claims to use extrasensory perception (ESP) to identify information hidden from the normal senses, or someone deeply sensitive to spiritual forces.

Establish Separate

To create or set up something (such as a unit, institution, or residence) to function independently or in a newly segregated manner.

Living Together

A situation where two or more people, often in a romantic relationship, share a common residence without being legally married.