Which of the Following Is True with Regards to the Financial

question 66

Multiple Choice

Which of the following is true with regards to the financial meltdown of 2008?

• A)The financial crisis of 2008 had been in the subprime mortgage markets and later spread to the financial system and the broader economy.
• B)The five largest investment banking firms were merged with other financial institutions, went bankrupt, or converted to bankholding companies to gain access to borrow from the Fed.
• C)A series of unprecedented collapses of financial institutions began that culminated in a massive bailout of the financial system by the government.
• D)All of the above are true.

---

Definitions:

Double-declining Balance

A method of accelerated depreciation where the asset’s book value is decreased at double the rate of traditional straight-line depreciation.

Straight-line Depreciation Rate

The straight-line depreciation rate is a method of calculating the depreciation of an asset, where its cost is evenly spread over its useful life, resulting in a fixed annual depreciation expense.

Salvage Value

The estimated value that an asset will realize upon its sale at the end of its useful life.

Total Asset Cost

The sum of all costs incurred to acquire an asset and make it ready for its intended use.