Which of the Following Statements Regarding Subprime Mortgages Is TRUE

question 3

Multiple Choice

Which of the following statements regarding subprime mortgages is TRUE?

• A)Subprime mortgages are not Ginnie Mae guaranteed,so CMO investors are exposed to default risk
• B)Subprime mortgages are not Ginnie Mae guaranteed,so securities backed by subprime mortgages cannot be issued
• C)CMOs backed by subprime mortgages cannot be used as collateral for CDOs
• D)Due to diversification,securities backed by subprime loans are of no more risk than those back by prime loans

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