Which of the Following Explains Why Mortgages Weren't Considered Securities

question 8

Multiple Choice

Which of the following explains why mortgages weren't considered securities in the United States prior to 1970?

• A)The Federal Reserve Act of 1913 prohibited mortgages from being considered securities.An amendment to the Act was approved in 1970 that allowed mortgages to be considered securities.
• B)Until 1970, the average annual increase in housing prices did not allow the buying and selling of mortgages to be profitable.There has been a significant annual increase in housing prices and mortgage values since 1970.
• C)Congress passed a law in 1970 stipulating that mortgages could be classified as securities.
• D)Prior to 1970, mortgages were rarely resold in the secondary market.
• E)Between the end of WWII and 1970 mortgage lending was subject to large swings in volume and interest rates.

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Definitions:

Central Banking

A financial institution designated by a government to manage the state's currency, money supply, and interest rates, as well as to oversee the commercial banking system.

Constitution

The supreme law of the United States, outlining the national frame of government and the rights of citizens.

Republicans

Members of the Republican Party, one of the two major political parties in the United States, often associated with conservative policies and positions on issues like taxation, national defense, and business regulation.

Westward Expansion

the 19th-century movement of settlers into the American West, encouraged by ideology, government policy, and opportunities for new land and wealth.