The fact that the credit-rating agencies both advised clients on how to structure the financial...

Question:

The fact that the credit-rating agencies both advised clients on how to structure the financial instruments that paid out cash flows from subprime mortgages and also rated these financial instruments contributed to the:

A) subprime financial crisis that began in 2007.

B) Enron collapse.

C) demise of Arthur Andersen.

D) technology bust.

Credit Rating Agencies:

A credit rating agency assigns rating which evaluates a debtor's ability to repay a debt timely which includes principal and interest along with the possibility of default.S&P Global Ratings (S&P), Moody's, and Fitch Group are the main CRA,s in United States.

Answer and Explanation: 1

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The correct option is A

Credit rating agencies (CRAs) played a key part in the subprime mortgage crisis in the United States in 2007-2008, which...

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Commercial Paper: Definition, Advantages & Disadvantages

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Chapter 8 / Lesson 10
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A great way for companies with high credit ratings to raise short term cash for operating purposes is through commercial paper. Most large public companies issue commercial paper.


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