Which of the Following Was a Change in Banks' Lending

question 131

Multiple Choice

Which of the following was a change in banks' lending practices that contributed to a housing bubble?

• A) Lenders began to require borrowers to provide proof of income.
• B) Banks began to originate subprime loans they did not intend to keep.
• C) Banks developed fixed-rate mortgage loans.
• D) Banks began to rigorously check borrowers' credit quality.

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Definitions:

Variable Selection

Refers to the process of choosing the most relevant variables for use in a statistical model.

Resale Value

The amount of money that an asset will be sold for at some point in the future.

F Test

A statistical test used to compare the variances of two populations or to test the equality of two or more means in the context of variance.

Predictor Variables

Independent variables in statistical models that are used to predict outcomes of dependent variables.