In the Early 2000s, Credit Ratings of Mortgage Backed Securities

question 22

Multiple Choice

In the early 2000s, credit ratings of mortgage backed securities turned out to be:

• A) too low, which led many investors to them during the financial crisis.
• B) accurate, but investors ignored the risk.
• C) too high, as many securities contained far riskier loans than initially realized.
• D) volatile, as it is hard to assess the risk of these securities.

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