According to Koos Timmermans 'three types of leverage helped propel the boom and have now accentuated the bust':
A) US financial institutions loaded up on debt; US corporations increased their debt to equity ratios; and the US government increased the national debt
B) US financial institutions were exposed to liquidity leverage via their use of structure investment vehicles; US corporations increased their debt to equity ratios; and the US government increased the national debt
C) US financial institutions were exposed to product leverage via complex instruments such as CDOs; US corporations increased their debt to equity ratios; and the US government increased the national debt
D) BUS financial institutions loaded up on debt; US financial institutions were exposed to liquidity leverage via their use of structure investment vehicles; and US financial institutions were exposed to product leverage via complex instruments such as CDOs

Question

Quizplus · Accepted Answer

Koos Timmermans identifies three types of leverage that contributed to the financial boom and subsequent bust: 1) US financial institutions increasing their overall debt levels, 2) their exposure to liquidity leverage through the use of structured investment vehicles, and 3) their exposure to product leverage via complex financial instruments like CDOs. These factors combined to amplify the financial crisis.

According to Koos Timmermans 'Three Types of Leverage Helped Propel