Bear Stearns and Lehman Brothers went bankrupt because:
A) their managers had an incentive to take on too much risk.
B) their mangers were too risk averse to try new and innovative banking products, such as credit default swaps.
C) compensation to top executives was based on how well their stocks performed relative to other firms.
D) managers feared the penalties associated with the downside risks of bad business decisions.
Correct Answer:
Verified
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