One Enduring Truth of Banking Is That

question 93

Multiple Choice

One enduring truth of banking is that

• A)for some reason, bankers always seem willing to lend huge amounts to borrowers with a limited potential to repay.
• B)credit ratings work, but only in the aggregate.
• C)when liquidity dries up, bankers are typically able to ride out the storm by buying up other investors debt at pennies on the dollar, holding it until the crisis is over, and then selling at a huge profit.
• D)none of the above

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Definitions:

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