The precipitous fall in the price of assets that takes place when financial institutions must sell their assets quickly in the midst of a crisis is called a(n):
A) insolvency.
B) subprime sale
C) speculative bubble.
D) fire sale.

Question

Quizplus · Accepted Answer

A fire sale refers to the situation where financial institutions must sell their assets quickly in the midst of a crisis, causing a rapid decline in asset prices. Insolvency refers to the situation where an institution lacks the ability to meet its debt obligations. Subprime sale and speculative bubble are not accurate descriptions of this situation.

The Precipitous Fall in the Price of Assets That Takes