Which of the Following Was a Major Problem with Subprime

question 31

Multiple Choice

Which of the following was a major problem with subprime mortgages?

• A)Housing costs remained low, making home ownership unattractive .
• B)The risk of defaults on these mortgages was higher .
• C)These mortgages were rarely offered by banks .
• D)The mortgages were limited to only the wealthiest borrowers .
• E)Banks made little money off of them, causing them to raise other fees .

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Definitions:

Objective Probabilities

Quantifiable likelihood or chance of an event occurring, based on statistical and empirical evidence rather than subjective judgment.

Probabilities

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 1 indicates certainty.

Certainty

The state of being sure or confident about something, often referencing situations in decision-making where outcomes are known.

Uncertainty

The state of being unsure about the future or about the outcome of specific processes or events.