The Boom in 'Sub-Prime' Lending (Which Was the Source of the GFC)was

question 63

Multiple Choice

The boom in 'sub-prime' lending (which was the source of the GFC) was motivated by the:

• A)desire to help low-income minority groups
• B)belief that the repayment capacity of borrowers had been misrepresented
• C)desire for high risk and return investments
• D)belief that housing prices would always rise
• E)provision of subsidies by the US government.

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Definitions:

Agency Operation

It refers to the functioning of an agency, including the actions and principles governing agents who are authorized to act on behalf of their principals in business transactions.

Bankruptcy

A legal proceeding involving a person or business that is unable to repay their outstanding debts, allowing them to negotiate for partial or complete relief from these debts.

Apparent Authority

A principle in law where a person appears to have authority to act on behalf of another party, such as a company, due to their conduct or statements.

Disclosed Principal

A principal whose identity is known by the third party at the time of entering into a contract with an agent.