Which of the Following Definitions Explains "Externality

question 2

Multiple Choice

Which of the following definitions explains "externality?

• A) Those environmental problems that are beyond the control of individuals
• B) Pressure from citizens outside an organization to demand corrective action by a company that pollutes
• C) Economic effects not taken into account in the decision making in a market
• D) When a third party joins in the ecological dialogue

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Definitions:

Securitization

The process of transforming illiquid assets into a tradable form by converting them into securities.

Private Equity

Capital investments made into companies that are not publicly traded, often to finance growth, acquisitions, or restructuring.

Dodd-Frank Reform Act

A comprehensive piece of financial regulation passed in 2010 in the United States, aimed at preventing the recurrence of financial crises through increased regulation.

Capital Requirements

The minimum amount of capital a bank or other financial institution must hold as required by its financial regulator.