The Development of "Collateralized Debt Obligations", by Drexel Burnham Lambert

question 17

Multiple Choice

The development of "collateralized debt obligations", by Drexel Burnham Lambert, shows that

• A)well-paid bankers always come up with good ideas.
• B)the financial system can be very fragile.
• C)financial products are easily copied so first movers must quickly establish a large track record of successful trades.
• D)a financial crisis was inevitable.

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Definitions:

Cash Balance

The amount of cash that a company or individual has available at any given time.

Advertising Expense

Advertising expense is the cost associated with promoting an organization’s products or services through various media channels.

Shareholder Dividends

A distribution of earnings to shareholders by a corporation, usually in the form of profit sharing.

Liabilities to Stockholders' Equity

A measure comparing a company’s obligations to the amount invested by its shareholders, often used to assess financial health.