Why Were Credit Default Swaps Initially Considered Low Risk

question 3

Multiple Choice

Why were credit default swaps initially considered low risk?

• A)Interest rates were low, which lowered the associated risk.
• B)Credit default swaps were backed by the federal government.
• C)Credit default swaps were backed by mortgage-backed securities.
• D)Insurance companies could easily cover any losses, as they were backed mostly by bonds.

Analyze the impact of trade policies on national economies.

Understand the role of exchange rates and balance of trade in international economics.

Evaluate the arguments for and against free trade.

Assess the economic implications of trade deficits and surpluses.

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Definitions:

Frontline Workers

Employees who are directly engaged with customers or the primary operations of the business, often facing the customers first.

Professionalism

The conduct, behavior, and attitude expected of an individual in a work or business environment, demonstrating competence and ethical standards.

Ethics

The study of what is right and wrong, encompassing moral principles that govern a person's behavior or the conducting of an activity.

Extra Mile

Going beyond what is required or expected in order to achieve excellence or demonstrate commitment.