In Response to the GFC and the Global Liquidity Crisis

question 33

Multiple Choice

In response to the GFC and the global liquidity crisis the Australian government introduced the following measure in 2008:

• A)a financial claims scheme that provided coverage to all depositors in any financial institution
• B)a financial claims scheme that guaranteed bank deposits coverage to depositors up to a million dollars per depositor
• C)a financial claims scheme that guaranteed bank deposits coverage to depositors up to a million dollars per depositor and provided a temporary wholesale funding guarantee
• D)All of the listed options are correct.

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Definitions:

Trading Securities

Financial assets that are bought and sold with the intention of generating profits from short-term price fluctuations.

Fair Value

An estimate of the price at which an asset or liability could be traded in a fair transaction between willing parties, other than in a forced or liquidation sale.

Cost Method

An accounting method used to record investments, where the investment is recorded at its acquisition cost without recognizing periodic gains or losses.

Outstanding Stock

The total shares of a company's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.