Many Lessons Should Be Learned from the Credit Crunch

question 63

Multiple Choice

Many lessons should be learned from the credit crunch.

• A)One lesson is that credit rating agencies need to refine their models for evaluating esoteric credit risk created in MBS and CDOs.
• B)One lesson is that borrowers must be more wary of putting complete faith in credit ratings.
• C)One lesson is that bankers seem not to scrutinize credit risk as closely when they serve only as mortgage originators and then pass it on to MBS investors rather than hold the paper themselves.
• D)All of the above

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Definitions:

Claims Tracker

A system or application that tracks the status of insurance claims throughout their lifecycle.

Direct Transmission

The immediate transfer of an infectious pathogen from a reservoir to a susceptible host through direct contact or droplet spread.

Clearinghouse Use

The process or function of a central agency or organization that collects, maintains, and distributes information or transactions, often for financial entities.