Which of the Following Explains Why Mortgages Weren't Considered Securities

question 126

Multiple Choice

Which of the following explains why mortgages weren't considered securities prior to 1970?

• A)The Federal Reserve Act of 1913 prohibited mortgages from being considered securities.An amendment to the Act was approved in 1970 that allowed mortgages to be considered securities.
• B)Until 1970,the average annual increase in housing prices did not allow the buying and selling of mortgages to be profitable.There has been a significant annual increase in housing prices and mortgage values since 1970.
• C)Congress passed a law in 1970 stipulating that mortgages could be classified as securities.
• D)Prior to 1970,mortgages were rarely resold in the secondary market.

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Definitions:

Variable-Ratio

A reinforcement schedule in which a response is reinforced after an unpredictable number of responses, leading to high and steady response rates.

Latent Learning

Learning that occurs without reinforcement but is not demonstrated until there is an incentive to perform.

Shaping

A method of training by which successive approximations toward a target behavior are reinforced, used especially in behavior therapy.

Law Of Effect

A principle in psychology that suggests behaviors are more likely to recur if followed by positive outcomes and less likely if followed by negative outcomes.