What Effect Did the Introduction of Securitization Have on the Economy

question 75

Multiple Choice

What effect did the introduction of securitization have on the economy?

• A) Banks could more safely assume subprime mortgage loans.
• B) The government was able to promote a sense of security in the banking industry.
• C) Banks could more safely leverage their investments.
• D) Borrowers felt better about taking out subprime loans.

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Definitions:

Cognitions

The mental action or process of acquiring knowledge and understanding through thought, experience, and the senses.

Learned

Acquired knowledge or skills through experience, study, or being taught.

Learning

A relatively permanent change in behavior, knowledge, capability, or attitude that is acquired through experience and cannot be attributed to illness, injury, or maturation.

Intuition

The ability to understand something instinctively, without the need for conscious reasoning.