An Important Factor in Producing the Subprime Mortgage Crisis Was

question 71

Multiple Choice

An important factor in producing the subprime mortgage crisis was

• A) lax consumer protection regulation.
• B) onerous rules placed on mortgage originators.
• C) weak incentives for mortgage brokers to use complicated mortgage products.
• D) strong incentives for the mortgage brokers to verify income information.

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Definitions:

Other Revenues

Revenue generated from secondary or ancillary activities, distinct from the main business operations.

Effective Tax Rate

is the average rate at which an individual or corporation is taxed, calculated by dividing the total tax paid by the taxable income.

Fair Value

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Goodwill

Represents the intangible asset arising when a company acquires another business for more than the fair value of its net identifiable assets.