Reference no: EM132516495

(Q1) Which of the following statements is correct?

A. The bailout of AIG was a typical case of the Too-Big-to-Fail problem.

B. The bailout of JP Morgan Chase was a typical case of the Too-Big-to-Fail problem.

C. At the onset of the Crisis, the Federal Reserve and the US government tried to solve the problems of financial institutions by pumping liquidity into the financial system.

D. the bankruptcy case of Bear Stearns evidences that the Federal Deposit Insurance Corporation (FDIC) did not fulfill its legal duty to insure financial institutions.

(Q2) Which of the following statements is correct?

Select one:

A. Compared with a CCP, an OTC derivative market make it harder to concentrate risk in some market participants.

B. Compared with a CCP derivative market, an OTC market provides participants with about the same level of customization.

C. A central counterparty (CCP) can lower counterparty risk in the economy but does not change market risk.

D. Compared with a CCP, an OTC derivative market is equally likely to result in Too-Big-to-Fail problems.