Some Claim That Ratings Agencies Have a Conflict of Interest

question 96

Multiple Choice

Some claim that ratings agencies have a conflict of interest since

• A) they rate the quality of their own bonds.
• B) agencies charge firms for their services rather than investors, they have an incentive to give high ratings to gain business.
• C) government began to include bond ratings as part of regulations of mutual funds, banks, and financial firms.
• D) they issued many of the mortgages that were later securitized into bonds.

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Definitions:

18 Months

A developmental milestone age for toddlers, often marked by significant growth in motor skills, speech, and emotional development.

Yellow Staining

Discoloration often associated with certain conditions, such as jaundice, or the result of exposure to substances like nicotine.

Jaundice

A yellowing of the skin and the whites of the eyes caused by high bilirubin levels, often indicating liver or bile duct issues.

Sclera

The white outer layer of the eyeball, providing structural support and protection for the eye.