Question

*The very low interest rates following the financial crisis of​ 2007-2009 resulted​ in: A. further declines...

*The very low interest rates following the financial crisis of​ 2007-2009 resulted​ in:

A.

further declines in checking accounts that began in early 1970s.

B.

many people moving their funds from CDs and money marketaccounts to checking accounts in order to have more liquidity without sacrificing much interest.

C.

people switching their funds from checking deposits to CDs in the pursuit​ of higher interest rates.

D.

funds being transferred from checking accounts to time deposits.

*Finance companies

A.

raise funds in financial markets to lend to households and firms.

B.

take in deposits from savers and make loans to borrowers.

C.

raise funds by selling stock to pension funds.

D.

issue bonds and use the proceeds to purchase stock.

*One of the Securities and Exchange​ Commission’s main goals is​ to:

A.

reduce information asymmetries.

B.

set​ short-term interest rates.

C.

ensure maximum returns to shareholders.

D.

underwrite IPOs.

Homework Answers

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Answer:

1)

One of the main reasons for 2007 - 2009 crisis is many people moving their funds from CDs and money marketaccounts to checking accounts in order to have more liquidity without sacrificing much interest.

2)

One of the main objectives of finance companies is to raise funds in financial markets to lend to households and firms

3)

Reduce Information assymetries as it will be in the best interests of shareholders

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