Investors Relied on the Judgment of Credit Rating Agencies Because

question 9

Multiple Choice

Investors relied on the judgment of credit rating agencies because:

• A)Credit rating agencies are supposed to be the experts in evaluating credit risk
• B)Information directly available to investors on mortgage pools was insufficient
• C)Credit rating agencies are supposed to perform a thorough due diligence before rating a given security
• D)All of the above
• E)(a)and (c)

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Definitions:

Assessment Tool

Instruments or procedures used to evaluate or measure specific characteristics, abilities, or conditions.

Categorical

Relating to, or based on the classification of people or things into specifically defined groups.

Dimensional

Pertains to an approach in psychology and psychiatry that quantifies symptoms or characteristics on a continuum, rather than categorizing them as present or absent.

Disorder Severity

Refers to the assessment of the intensity or degree of symptoms associated with mental or physical health conditions.