Which of the Following Was Designed to Head Off Panics

question 208

Multiple Choice

Which of the following was designed to head off panics among market participants and forestall crashes like the ones in October 1929 and October 1987?

• A)Program trading
• B)Circuit breakers
• C)Derivatives
• D)Volatility index

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Definitions:

Share Issue Costs

The expenses associated with issuing new shares of stock, including legal, accounting, and underwriting fees.

Fair Value

The valuation expected from selling an asset or the outlay needed to reassign a liability in a coordinated market transaction as determined on the measurement date.

Future Cash Flows

Estimates of the amount of money that is expected to be generated or expended by a business in future periods from its operational activities.

Goodwill

A non-physical asset that is recognized when a company is purchased at a price higher than the cumulative fair value of its recognizable net assets.