Recall the Application About How the Process of Securitization in Financial

question 91

Multiple Choice

Recall the Application about how the process of securitization in financial markets led to a rise in the rate of home ownership in the U.S. housing market to answer the following question(s) .
-According to this Application, some households were willing to take on considerable mortgage debt because

• A) they were confident they could make money as the values of their homes increased.
• B) this was a safe investment in light of the rapidly increasing inflation in the economy.
• C) they realized the mortgage debt would be more than offset by the tax deductions they could take on the interest paid on their mortgage loans.
• D) the government's federal home mortgage insurance program would compensate them for any loss in value they may realize based on the purchase price of their homes.

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Definitions:

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is naturally present in air and is absorbed by plants in photosynthesis.

Red Blood Cells

Cells in the blood that transport oxygen throughout the body and give blood its red color.

Carbon Monoxide

A colorless, odorless, and tasteless gas that is toxic to humans and animals when encountered in concentrations above about 35 parts per million.

Hemoglobin

A protein in red blood cells that carries oxygen from the lungs to the body's tissues and returns carbon dioxide from the tissues back to the lungs.