Why Didn't Investors Caught in the Subprime Lending Crisis Take

question 20

Multiple Choice

Why didn't investors caught in the Subprime Lending Crisis take earlier note of the risks inherent in investments known as collateralized debt as obligations (CDOs) ?

• A)Greed and the desire for high returns.
• B)Banks were selling and buying them.
• C)Risks were buried in complex, jargon-oriented documents.
• D)Risks were diversified over many mortgages.
• E)Only three of the above.

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Definitions:

Biological Correlates

Biological factors or processes that are associated with specific psychological or behavioral phenomena.

Character Flaws

Inherent weaknesses or imperfections in a person's character that may lead to negative outcomes or hinder personal development.

Deep-Seated

Firmly fixed or rooted; ingrained in the deepest part of a person's mind or nature.

Contracted

In general terms, it means entered into an agreement or reduced in size; in a medical context, it can refer to having caught or developed a disease.