________ Took Place in Financial Markets During the Great Recession

question 9

Multiple Choice

________ took place in financial markets during the Great Recession because large financial institutions took excess risks to realize abnormal positive returns in the housing market while they were simultaneously protected from abnormal losses by being "too-big-to-fail."

• A)Disintermediation
• B)Deregulation
• C)Corporate tax reform
• D)Moral hazard

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Definitions:

Tax Rate

The quantified percentage of an individual’s or corporation’s income that is taken as tax.

Cost of Preferred Stock

The required rate of return on preferred stock, which is typically fixed.

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, typically without voting rights but with a fixed dividend payment.

Issued

Pertains to the act of making securities available for sale to the public or allotting them as part of compensation to employees or other stakeholders.