Which of the Following Bank Assets Declined in Value in the Mid-2000s

question 49

Multiple Choice

Which of the following bank assets declined in value in the mid-2000s?

• A)subprime loans
• B)mortgage-backed securities
• C)collateralized debt obligations
• D)nontraditional loans
• E)all of the above

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Definitions:

Profitability Index

A financial metric that measures the relative profitability of an investment by dividing the present value of future cash flows by the initial investment cost.

Present Value

Present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Net Cash Flows

The difference between a company's cash inflows and outflows over a specific period.

Accounting Rate

Typically refers to the rate of return or interest rate used in financial calculations, such as net present value or internal rate of return.