Which of the Following Is Not a Contributor to the Development

question 37

Multiple Choice

Which of the following is not a contributor to the development of the housing bubble?

• A) People expected housing prices would continue to rise.
• B) Leveraging more of a home's value became easier, putting buyers further into debt.
• C) Mortgage lenders had lost some incentive to properly assess the risk of lending.
• D) Homeowners lacked confidence in the institutions that made their loans.

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Definitions:

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.

Amortization Expense

The method of incrementally expensing the original value of an intangible asset throughout its period of utility.

Straight-Line Amortization

A method of gradually writing off the nominal value of an intangible asset over its useful life in equal installments.

Business Combination

A transaction or other event in which an acquirer gains control over one or more businesses, possibly resulting in a new entity.