As Was Demonstrated in 2007,firms in the Shadow Banking System

question 256

Multiple Choice

As was demonstrated in 2007,firms in the shadow banking system

• A)were very vulnerable to bank runs.
• B)were protected from financial ruin by federal deposit insurance.
• C)were well insulated from bank runs.
• D)were more insulated from the financial crisis than were commercial banks.

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Definitions:

Annual End-Of-Year

A term typically referring to financial transactions or reports that are calculated, summarized, or finalized at the end of the fiscal year.

Journal Entries

Records of financial transactions in the accounting system, detailing the accounts affected and whether they are debits or credits.

Effective Interest Method

A method of calculating the interest rate on a bond that factors in the actual amount paid over the life of the bond, including any fees or costs.

Amortization Table

A table that outlines each periodic payment on a loan over time, breaking down the amounts that go towards the principal and interest.