Which Statement in Connection with the Alleged Manipulation of Bbalibor

question 7

Multiple Choice

Which statement in connection with the alleged manipulation of bbalibor by several London-based international banks in 2008 is INCORRECT?

• A) In early 2008,bbalibor was higher than what it should have been because of irrational reactions to the credit crisis.
• B) Toward the end of 2007 and in early 2008,many market observers complained that bbalibor was lower than what it should have been,and that it did not reflect the true cost of bank funds.
• C) Bbalibor's originator,the British Bankers' Association,initially denied any bias in bbalibor values,but eventually agreed to conduct a review of the matter.
• D) The alleged mispricing was reduced after it became known that British Bankers' Association was conducting a review of the bbalibor.
• E) The alleged mispricing of bbalibor has attracted regulatory probes and lawsuits.

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Definitions:

Inelastic Demand

Refers to a situation where the demand for a product does not significantly change with a change in its price.

Elastic Supply

A condition where the quantity supplied of a good changes significantly due to a slight change in its price.

Subsidy

A financial aid or support extended by the government to an economic sector, business, or individual, often aimed at promoting economic and social policies.

Elasticity of Demand

An analysis of consumer demand's elasticity in relation to the pricing of a commodity.