25-78 the Growth of the Commercial Paper Market Has Hurt

question 64

Multiple Choice

25-78 The growth of the commercial paper market has hurt the market for loan sales by

• A)offering some borrowers alternatives to bank loans.
• B)underpricing the banks that sell loans.
• C)fostering the credit crunch.
• D)adding another regulatory layer since the SEC requires shelf registration of new issues.
• E)increasing moral hazard concerns in the market.

---

Definitions:

Opportunity Cost

The foregone benefit that could have been obtained from an option not chosen.

Inventory Holding

The costs associated with storing unsold goods, including warehousing, insurance, and depreciation.

Inwards Inspection

Inwards Inspection refers to the process of checking, validating, and approving materials or products received from suppliers before they are used in production or put to stock.

Rental

The payment, usually monthly, owed by a tenant to a landlord for the use of real estate, equipment, or other properties.