The Recent Financial Crisis Highlighted, in Retrospect, How Heavily Households

question 107

Multiple Choice

The recent financial crisis highlighted, in retrospect, how heavily households and businesses had come to rely on FIs to act as specialists in

• A)generating profits and lowering costs.
• B)risk measurement and management.
• C)investment advice and brokerage services.
• D)time intermediation and denomination mediation.
• E)derivative securities and interbank borrowing.

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Definitions:

Borrowed

The act of receiving something with the promise to return it or its equivalent, often referring to funds obtained with the agreement to pay back with interest.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Stop-Buy Order

An order placed with a broker to buy a security once it reaches a certain price, used to limit loss or protect profit.

Short-Sell

A trading strategy where an investor borrows a security and sells it on the open market, planning to buy it back later for less money.