Which of the Following Is a Reason Why the Financial

question 18

Multiple Choice

Which of the following is a reason why the financial crisis occurred?

• A) lax mortgage lending standards
• B) strong government regulation of over-the-counter derivatives markets
• C) accurate rating of structured debt by the credit rating agencies
• D) strong due diligence of financial institutions with respect to their investments
• E) sufficient capital in financial institutions

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Definitions:

Revenue Test

A criterion used to determine the effectiveness of a business's ability to generate income.

Total Amount

The complete sum or quantity calculated by adding together all the individual components or values.

Revenues

The total amount of income generated by the sale of goods or services related to a company's primary operations.

Reportable Segment

A part of an organization that engages in business activities from which it may earn revenues and incur expenses, and whose operating results are regularly reviewed by the organization's chief operating decision maker.