The Same Tools That Were Intended to Allocate Funds and Spread

question 40

Multiple Choice

The same tools that were intended to allocate funds and spread risk more efficiently in the housing market made it:

• A) easier to keep everyone fully informed.
• B) more difficult to keep everyone fully informed.
• C) easier to understand the true risk involved with these assets.
• D) more difficult to justify buying mortgage-backed securities over other low-risk assets.

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Definitions:

Certain

Completely confident or sure about a situation or outcome.

Taxes

Mandatory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Federal Transfer Payments

Payments from the federal government to individuals, states, or other governmental entities without any requirement for repayment.

GDP

GDP, the cumulative market price of all ultimate goods and services produced within the confines of a country over an allotted timeframe.