In September 2008, the Fed and the U.S. Treasury A. saved AIG, but not Lehman Brothers, from bankruptcy. B. saved both Lehman Brothers and AIG from bankruptcy. C. saved Lehman Brothers, but not AIG, from bankruptcy. D. saved neither Lehman Brothers nor AIG from bankruptcy.
A. saved AIG, but not Lehman Brothers, from bankruptcy.
the above is answer..
the government had given financial bailout of USD85 billion to save AIG, but it let Lehman to fail.
In September 2008, the Fed and the U.S. Treasury A. saved AIG, but not Lehman Brothers,...
29) When financial institutions go on a lending spree and expand their lending at a rapid pace they are participating in a A) credit boom. 8) credit bust. C) deleveraging. D) market race. 30) Which investment bank filed for bankruptcy on September 15, 2008 making it the largest bankruptcy filing in U.S. history? A) Lehman Brothers B) Merrill Lynch C) Bear Stearns Goldman Sachs
[Related to the Making the Connection] Financial journalist James Stewart notes that in contrast to its actions with respect to Lehman Brothers, open double quotethe Fed did lend into continuing runs at both Bear Stearns and A.I.G., although officials argued then that those companies had adequate collateral to guarantee repayment.close double quote Source: James Stewart, open double quotePointing a Finger at the Fed in the Lehman Disaster,close double quote New York Times, July 21, 2016. In open double quotelending into...
In September 2008, Fed chairman Ben Bernanke contacted the Treasury Secretary to ask for help in dealing with the growing financial crisis, causing Congress to create TARP and bail out the banks, insurance companies, and even General Motors, resulting in a massive increase in the deficit. Was getting Congress involved necessary or could the Federal Reserve have done all the heavy lifting? Which is more important in solving a financial crisis, monetary policy or fiscal policy?
1) When the Fed purchases U.S. treasury securities, bank reserves will Select one: A. expand and the fed funds rate will rise. B. contract and the fed funds rate will rise. C. expand and the fed funds rate will fall. D. contract and the fed funds rate will fall. 2) Open market operations may be best described as the FOMCs buying or selling of Select one: A. U.S. government securities in the financial markets. B. foreign currencies in foreign exchange...
1) If the Fed believes that the U.S. economy is overheated and in danger of unacceptably high rates of price inflation, it will most likely Select one: A. lower the Federal Reserve discount rate of lending. B. sell U.S. Treasury securities from its own portfolio. C. decrease the legal reserve ratio for member banks. D. buy U.S. Treasury securities from bond dealers.
1. During the financial crisis of 2008, the prices of U.S. Treasury securities A) rose and the price of corporate bonds declined. B) fell relative to the prices of corporate bonds. C) remained in the same relative position to the prices of corporate bonds. D) were frozen by order of the federal government. 2. Which combination of assets represents the most diversification? A) holding corporate and Treasury bonds B) holding shares of Google and Yahoo C) holding shares of Google...
How can an investment bank experience a "run"? Because investment banks borrow a.short term in the repo market, the refusal of lenders to renew their repos is akin to a commercial bank's depositors withdrawing funds. b. short term from commercial banks, they will experience a "run" whenever commercial banks do. c. from the U.S. Treasury, a "run" can happen to an investment bank if the Treasury allows expenditures to exceed tax revenues. d. long term from a variety of lenders,...
What condition led the Fed to begin using quantitative easing? a. Congress authorized the Fed to get involved in fiscal policy. b. Unemployment and inflation were both rising quickly, rendering traditional monetary policy unusable. c. The Fed could no longer reduce interest rates. d. Stagflation rendered open-market operations practically pointless because banks were neither buying nor selling bonds.
If the federal reserve wants to stimulate the U.S. economy, it will use open market operations to: A. Buy treasury securities from its dealer network. B. Lower the fed funds rate C. Both of the abov D. None of the above Which of the following statements is true concerning market rates? A. a raising market interest rates generally stimulates the economy B. lowering market interest rates generally slows the economy C. Both of the above D. None of the above...
16. Money market instruments issued by the U.S. Treasury are called (a) Treasury bills. (b) Treasury notes. (c) Treasury bonds. (d) Treasury strips. 17. The most influential participant(s) in the U.S. money market (a) is the Federal Reserve. (b) is the U.S. Treasury Department, (c) are the large money center banks. (d) are the investment banks that underwrite securities 18. Federal funds are (a) usually overnight investments. (b) borrowed by banks that have a deficit of reserves. (c) lent by...