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.

Understand the role of diminishing marginal returns in shaping the expected-rate-of-return curve for R&D investments.

Recognize different sources of funds for R&D and their implications for R&D decision making.

Determine the conditions under which a firm should expand or reduce its R&D expenditures.

Understand the concept and importance of process innovation in improving production methods and its impact on a firm's total product curve and cost structure.