Explain how the market can reduce the incentive for credit-rating firms to take advantage of conflicts of interest
What will be an ideal response?
If a credit-rating firm gives a higher than deserved rating to debt issuers, then the ratings from the firm will lose credibility. If that happens, then the ratings will have a lower value in the marketplace.
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Who among the following is exercising their right to pollute?
A) The group of campers burning a fire in a designated fire pit at a state forest campsite B) The Sunday morning churchgoer whose auto emits carcinogens from its exhaust pipe C) The publicly-owned and federally-regulated coal-fired electric utility D) All of the above. E) None of the above.
A market with one or a small number of firms but no barriers to entry is known as
A) a natural monopoly. B) a contestable market. C) a perfectly competitive market. D) monopolistic competition.