Financial managers learned many lessons following the financial crisis of 2007

Question

Financial managers learned many lessons following the financial crisis of 2007 - 2008. These lessons include all of the following except:
A) financial risk management is important.
B) executive compensation should be tied to some measure of risk, not just earnings
C) reliance on bank financing for short-term needs is recommended during a credit crunch.
D) companies that rely on securitizing their assets should be prepared for the associated risks.

Quizplus · Accepted Answer

The financial crisis of 2007-2008 highlighted the dangers of relying too heavily on bank financing for short-term needs, especially during a credit crunch, when banks may tighten lending standards or reduce lending altogether. This makes option C incorrect as it suggests the opposite of what was learned.