Many investors that purchased the mortgage-backed securities just before the credit crisis believed that they were misled, because these securities were riskier than they were misled, because these securities were riskier than they thought. who is at fault?

Q: Which innovation has caused the most trouble for financial institutions that issue residential…

A: Answer: The correct answer is option A. Securitization.

Q: Why would investors buy securities that contain bad commercial real estate loans? A. Inaccurate…

A: A form of financial transformation known as securitization combines different assets, such as loans…

Q: Which of the following hindered the development of a secondary market for mortgages in the early…

A: "Since multiple questions has been asked, only first question would be answered as per the…

Q: Why do users of derivatives need to be careful? What did Silicon Valley bank do to fail and how can…

A: A derivative is a financial instrument whose value is derived from the asset that is used to create…

Q: Describe some of the motives and mistakes made by the mortgage brokers?

A: To market and attract new borrowers for the lenders Assessment of credit history of the borrowers.…

Q: In your opinion, do we still need a regulator if the banks are collapsing anyway?

A: Federal and state governments have various organizations set up that control and administer…

Q: What would happen to the standard of living in the United States if people lost faith in our…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: balance-sheet mismatch that financial intermediaries

A: Financial intermediaries as the name suggest are the middlemen between two parties engaged in a…

Q: During the 2008 recession, large financial institutions including investment and insurance…

A: The 2008 recession also known as global financial crisis was a severe worldwide economic downturn…

Q: Banks lost money during the mortgage default crisis because: Multiple Choice of defaulted loans to…

A: Banks are losing money due to the mortgage default crisis because-Mortgage-backed securities played…

Q: The company's bank won't lend it any more money than it already has, and investment bankers have…

A: A covenant or Indenture is a type of undertaking accepted by an issuer to restrain from doing…

Q: Which of the following is NOT true?       swaps (CDS) and collateralized debt obligations…

A: Usually, the rates of any reserves for the banks and financial institutions are fixed for every bank…

Q: The severity of a recession can be magnified by credit market imperfections in which: there is…

A: Credit market imperfections refer to the situations where the assumptions of perfect competition,…

Q: Before the financial crisis, mortgage-backed securities were considered to be very safe investments.…

A: before the financial, crisis the value of mortgaged back securities was high in demand after…

Q: Would you not agree that the financial institutions and federal authorities are equally to blame for…

A: Lending to subprime borrowers is more likely to default than lending to prime borrowers. In the…

Q: Which is incorrect about financial securities? a. Financial securities are guarantees the holders in…

A: Securities are financial instrument that are traded in the open market by investors. They are…

Q: 1(A).Why did Lenders/Banks start to securitize mortgages (creating Collateralized Mortgages or Debt…

A: CMOs stand for collateralized mortgage obligations. CDOs stand for collateralized debt obligations.…

Q: How has the credit crisis May have adversely affected many homeowners and mortgage companies?

A: Homeowners insurance policies are defined as the type of an insurance policies, which usually covers…

Q: 171.One of the elements addressed in the Dodd-Frank bill was authority over nonbank financial…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Most nonfinancial firms would never hold as much of their assets in safe liquid securities as banks…

A: Banks helps the investor's by borrowing money from them and giving them periodic interest and  helps…

Q: D All of the options are correct statements.

A: Insurance refers to the contract between the insurance company and the person in which the fixed…

Q: according to principles of behavioural finance, which statements is True? a) investors always behave…

A: The behavorial finance is a branch of finance which will believe that investors will be acting on…

Q: Which of the following is NOT an example of a social cost of financial markets? Inflation A…

A: The social cost of financial markets refers to the negative consequences or externalities that can…

Q: Investors do not get compensated for holding on to diversifiable risk. True False

A: Risk which are particularly to some companies and can be eliminated or reduced by investing in other…

Q: 4. Which is incorrect about financial securities? a. Financial securities are guarantees the holders…

A: We'll answer the first question since the exact one wasn't specified. Please submit a new question…

Q: in why the covered interest rate parity (CIP) condition can be violated during the financial crisis…

A: Covered interest rate parity says changes in interest rate and changes in exchange rate should be in…

Q: FinTech firms are facing increased regulatory oversight. A risk event at a FinTech firm can result…

A: The danger of losing money on an investment or business endeavor is referred to as financial risk.…

Q: Which is correct about financial securities? a. Financial securities guarantees return to investors.…

A: "Hi, Thanks for the Question. since you asked multiple question, we will answer the first question…

Q: Select all that are true regarding liquidity risk for a bank. O Consumer trust in the bank ensures a…

A: The answer is provided below.

Q: Match the correct type of bank risk with the appropriate associated statement. 1.The possibility…

A: Risk is referred as the possibility of the something bad happened. It also involves in an…

Q: But isn't it because when you invest in government bonds it's riskfree and therefore is Lokey wrong?

A: Government bonds are the bonds issued by the government. All payments related to the bond such as…

Q: to the individual or company that 3. A security is issues it. to the person who buys it, but A)…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following is not true regarding the Financial Reform Act of 2010? O It required banks…

A: Financial Reform  Act 2010- After the 2008 financial crisis , Financial Reform  Act 2010 was passed…

Q: vi) The risk that a pregnancy will result in multiple births (twins, triplets, etc.) incurring…

A: Insurable risk:The possibility of loss or damage that can be measured and transferred to an…

Q: Which of the below statements is TRUE? O a. Frequently, the ability of an issuer to make interest…

A: Rating agencies are those agencies which assign credit ratings to the issuer of securities.…

Q: Which of the following about Treasuy inflation protected securities is NOT true:

A: A treasury inflation protected security is one which protects the investor from rising inflation.…

Q: Only (b) and (c) are true.

A: Mark to market rule refers to the method in which fair values in the account which relate to the…

Q: Why would an investor want to have some sort of credit enhancement included in a securitization? a.…

A: In finance, securitization is the process of conversion of an asset, most commonly the conversion of…

Q: o secure the bonds with owned assets in great detial. In what ways does it make the bonds more…

A: A bond is a type of debt instrument certifying the loan taken from the investor. The rate of…

Q: While individual consumers have a credit score, large, publicly-held corporations are not typically…

A: It is the score that determines the creditworthiness of any entity be it an individual, company,…

Q: Which of the following is an example of diversifiable risk? a) Interest rates rising b) A…

A: Diversifiable risk also known as unsystematic risk are those which is particular to a business or a…