Which of the Following Is a Possible Reason Why Credit

question 4

Multiple Choice

Which of the following is a possible reason why credit rating agencies incorrectly rated structured debt?

• A) incentive problems in the way credit rating agencies were paid
• B) the industry is collusive
• C) they were not overseen by the Securities and Exchange Commission
• D) the credit rating agencies were understaffed
• E) the credit rating agencies were losing profits before the crisis

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Definitions:

Decisive Victory

A military outcome that conclusively resolves the objective being fought over, leaving the victor clear and undisputable.

Second Continental Congress

A convention of delegates from the Thirteen Colonies that met beginning in May 1775, managing the colonial war effort and moving towards independence.

Independence

The state of being free from control or influence from others, especially regarding political autonomy.

Compromising

The process of making concessions or reaching agreements where both parties give up something to resolve a conflict.