Part of the Reason Why Credit Ratings Firms Did Not

question 6

Multiple Choice

Part of the reason why credit ratings firms did not catch major problems prior to the global financial meltdown of 2008 was because they were paid by the firms that they rank,which creates

• A)economies of scale.
• B)synergy.
• C)a conflict of interest.
• D)cooperation.
• E)efficiency.

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Definitions:

Stock Prices

represent the current market value of a share of a company's stock, influenced by investor demand, company performance, and market conditions.

Internet Companies

Businesses that operate primarily on the internet, offering services such as social networking, online shopping, and information sharing.

Fundamentals

The basic elements or principles of a subject, theory, or system.

Over-optimism

Over-optimism refers to the tendency of individuals to hold an unrealistically positive view of the future or the outcomes of events, which can affect decision-making processes.