By Purchasing Large Amounts of Mortgage-Backed Securities (MBS) in 2009

question 23

Multiple Choice

By purchasing large amounts of mortgage-backed securities (MBS) in 2009, the Federal Reserve's goal was to

• A)raise the price of MBS and raise their yields.
• B)raise the price of MBS and lower their yields.
• C)lower the price of MBS and raise their yields.
• D)lower the price of MBS and lower their yields.

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Definitions:

Defaults

Failure to fulfill an obligation, especially failure to meet a financial obligation or to appear in a court of law.

Guarantor

An individual or organization that commits to taking on the debt or fulfilling the contract obligations of another party if that initial party does not uphold their responsibilities.

Subrogation

The legal process by which one party assumes the rights of another party to recover debts or damages paid on their behalf.

Surety

A surety refers to a person or entity that takes responsibility for another's performance of an undertaking, for example, guaranteeing the payment of a debt.