In the last months of 2008 following the collapse of ________, interest rates on commercial paper ________ and access to this form of liquidity ________.
A) Lehman Brothers; rose by over 5 percent; contracted
B) Washington Mutual; fell by over 3 percent; expanded
C) Merrill Lynch; rose by 5 percent; stayed constant
D) General Motors; rose by over 3 percent; contracted
E) AIG; stayed constant; remained unchanged

Question

Quizplus · Accepted Answer

The collapse of Lehman Brothers led to a tightening of credit markets and a lack of trust among financial institutions, leading to a rise in interest rates on commercial paper and a contraction of access to this form of liquidity. None of the other choices accurately reflect these events.

In the Last Months of 2008 Following the Collapse of ________