During the 2007-2009 Financial Crisis,housing Prices Began to Fall and Subprime

question 90

Multiple Choice

During the 2007-2009 financial crisis,housing prices began to fall and subprime mortgages began to default.Which of the following statements is true about the rating of subprime mortgage products?

• A) The rating agencies were way ahead of the market, giving many of the subprime products junk ratings from the start.
• B) Rating agencies were not involved. Subprime mortgages could not be structured, by law.
• C) Many AAA-rated subprime products had to be downgraded over and over again until they reached junk status.
• D) None of the above are true.

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Nature of Competition

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