[Online Document Assignment:]
EIA Activity: The Day the Lights Went Out at Lehman
Click on the links on the right to answer the following questions.
Use Link 1 to answer the following questions. True or False: When Lehman Brothers collapsed in September 2008, this set off a chain reaction of events in the financial markets.
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True or False: Six years after the collapse of Lehman Brothers, the United States and the United Kingdom engaged in a “war game.”
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True or False: The purpose of a “war game” is to act as a stress test to see how well new regulation rules work both domestically and globally.
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Use Link 2 to answer the following questions. True or False: After Lehman Brothers collapsed, many banks around the world were unwilling to lend to each other, which is why the Federal Reserve offered billions of dollars in loans to these banks.
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True or False: Both the credit markets and the stock market responded well to the Federal Reserve’s decision to loan out billions.
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What is a subprime mortgage? Discuss.
Discuss the pros and cons of assets directly tied to real estate.
Were there any similarities between Lehman Brothers, AIG, and Bear Sterns? Discuss.
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