When Global Capital Markets Collectively React to International Events Like

question 112

Multiple Choice

When global capital markets collectively react to international events like Enron's collapse,it is common to find:

• A) that there is a positive impact on multinational companies' ability to raise capital.
• B) an increase in capital available to companies with AAA grade credit ratings.
• C) that multinational firms,though diversified,are not affected by this event.
• D) a reduction in capital available to companies with investment grade credit ratings.

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Definitions:

Net Liability

Net liability refers to the total liabilities of an entity minus its assets, indicating a financial position where obligations exceed resources.

Accrued Interest

Interest that has been incurred but not yet paid.

Premium

An amount paid in excess of the normal or nominal value, often relating to the additional cost over the face value of securities or insurance charges beyond standard rates.