Mortgage-Backed CDOs Were a Disaster in 2007 Because

question 9

Multiple Choice

Mortgage-backed CDOs were a disaster in 2007 because

• A) they were formed by pooling high quality fixed-rate loans with low interest rates.
• B) they were formed by pooling subprime mortgages.
• C) home prices stalled.
• D) the mortgages were variable rate loans, and interest rates increased.
• E) they were formed by pooling subprime mortgages, home prices stalled, the mortgages were variable rate loans, and interest rates increased.

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