Which of the following was a contributing factor to the rising default and foreclosure rates beginning in the latter half of 2006?
a. the increasing share of 30-year, fixed rate loans as a share of outstanding mortgages
b. the rigid standards of rating agencies, such as Moody's and Standard and Poors, which limited the development of mortgage-backed securities
c. the price-stability policies of the Federal Reserve during 1998-2008
d. the erosion of lending standards during the preceding decade
D
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When income increases from $20,000 to $30,000 the number of home delivered pizzas per year increases from 22 to 40. The income elasticity of demand for home delivered pizza equals
A) 1.45. B) 0.69. C) 0.58. D) 0.40. E) 2.86.
Answer the following statements true (T) or false (F)
1) Compound interest refers to the multiple interest rates an investor will be paid in a diversified portfolio. 2) A 10 percent rate of interest will increase the value of an asset more quickly if the interest is compounded. 3) Future value measures the present-day value of returns or costs expected to arrive in the future. 4) The present value of a stream of lottery payments is less than the size of the stated jackpot.