All of the Following Have Contributed to the Problems of U.S.depository

question 153

Multiple Choice

All of the following have contributed to the problems of U.S.depository institutions during the last 20 years except one.Which is the exception?

• A)Interest rates rose during the 1970s.
• B)Interest rate ceilings limited the ability of depository institutions to compete with other financial institutions.
• C)Brokerage houses began offering money market mutual funds.
• D)The loans made by thrift institutions tended to be short-term loans.
• E)Many savers withdrew deposits from thrift institutions.

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Definitions:

Market Value

The ongoing purchase or sale price of an asset or service.

Firm Commitment Underwriting

A type of underwriting where the underwriter buys the entire offering from the issuer and sells it to investors, assuming full financial risk.

Underwriting Spread

The difference between the amount underwriters pay to acquire securities from the issuer and the price at which they sell these securities to investors.