In the Global Credit Crisis of 2008, What Was the Function

question 37

Multiple Choice

In the global credit crisis of 2008, what was the function of credit default swaps?

• A)It derived or created credit for borrowers
• B)It insured mortgage-backed securities
• C)It guaranteed payment by the U.S.government
• D)It insured insurance companies
• E)It introduced financial instruments like mortgage-backed securities in the market

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, including revenues, expenses, gains, and losses.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Financial Statement

Documents that provide an overview of a company's financial condition, including profit and loss statements, balance sheets, and statements of cash flows.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in the net income.