Rating Agencies Were Exposed to a Conflict of Interest Because

question 16

Multiple Choice

Rating agencies were exposed to a conflict of interest because

• A) credit rating agencies were rating securities and investing in those securities.
• B) credit rating agencies used ratings to sell securities.
• C) clients of the credit rating agencies used ratings to sell securities.
• D) investors do not want rating downgrades.
• E) credit rating agencies were paid by the firms who created the securities being rated.

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Definitions:

Psychological Needs

Basic human motivations that include the need for love, esteem, belonging, autonomy, and competence, influencing behavior and well-being.

Terminated Employees

Employees who have been dismissed or laid off from their positions within an organization.

Vertical Integration

The merger or acquisition of two organizations that have a buyer-seller relationship.

Integration Difficulties

Challenges faced when combining different systems, processes, cultures, or organizations into a cohesive and functioning whole.