Which of the Following Was Not a Reason for the Financial

question 58

Multiple Choice

Which of the following was not a reason for the financial collapse in 2008?

• A)​inaccurate ratings by S&P and Moody's
• B)​government promoting aggressive mortgage lending
• C)​pooling of mortgage backed securities
• D)​the absence of financial leveraging in the banking industry

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Definitions:

Selling Price

the amount of money for which a good or service is sold to a customer, not necessarily reflecting the cost of production or provision.

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee, typically recognized as a portion of the investee’s net income or loss.

Voting Shares

Shares that give the shareholder the right to vote on matters of corporate policy making and on the election of the board of directors.

Equity Securities

Financial assets representing ownership interest in a company, such as stocks.