Some Observers Claim That the U

question 20

Multiple Choice

Some observers claim that the U.S. Federal Reserve Board encouraged the housing and credit bubbles by

• A) not regulating subprime mortgages.
• B) cutting interest rates.
• C) enforcing mark to market accounting.
• D) not regulating subprime mortgages and cutting interest rates.
• E) not regulating subprime mortgages and enforcing mark to market accounting.

---

Definitions:

Capital Investment Analysis

The process by which management plans, evaluates, and controls long-term capital investments involving property, plant, and equipment.

Fixed Assets

Fixed Assets are long-term tangible assets purchased for use in business operations, intended to be used for more than one accounting period.

Long-term Investment

Investments made by a company to hold for more than one year, often in bonds, stocks, or real estate.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.