The Treasury Used Most of the Funds Allocated by the Troubled

question 36

Multiple Choice

The Treasury used most of the funds allocated by the Troubled Asset Relief Program (TARP) to:

• A) purchase mortgage-backed securities.
• B) make equity injections into troubled financial institutions.
• C) create a new regulatory agency to oversee risky assets.
• D) make emergency loans to the FDIC.

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Definitions:

Cash Cycle

The period between the outlay of cash for goods and services and the cash recovery from sales.

Credit Sales

Sales made by a business where the payment is deferred to a later date, often involving credit terms.

COGS

Stands for Cost of Goods Sold and refers to the direct costs attributable to the production of the goods sold by a company.

Payables Turnover Rate

A liquidity metric that measures how quickly a company pays off its suppliers by dividing total purchases by average accounts payable.