Question

The term "Greenspan Put" was coined to describe a federal regulation, crafted by Alan Greenspan as Chair of the Federal Reserve, that prohibited investment firms from taking large risks without sufficient capital to cover their losses.a. Trueb. False

Answer 1

Answer:

The correct answer is letter "A": True.

Explanation:

Named after American economist and the United States Federal Reserve chairman Alan Greenspan (born 1926), the "Greenspan Put" was a contractual obligation providing a put option holder the ability to sell the asset to another party at a certain price. The put option could be exercised if the price fell below that put price so it could protect the holder from further losses. In other words, even in front of a large risk, investors would be protected to avoid major losses.