One of the Contributing Factors in the 2007 U

question 43

Multiple Choice

One of the contributing factors in the 2007 U.S. residential housing collapse was the use of Option Reset Adjustable Rate Mortgages (ARMs) . Which of the following best describes this financial vehicle?

• A) Mortgage payments were set based on prevailing market interest rates but on only a portion of the value of the mortgage. The unpaid balance was deferred for payment in a future period.
• B) The payment on the mortgage, at prevailing market rates, was based on the full value of the mortgage but was split between a portion of the payment made by the property owner, with the balance paid by a third-party financial institution.
• C) Payments made on the full value of the mortgage were based on below-market interest rates. Balances owing as a result of the difference between this rate and the prevailing market interest rate were carried forward and ultimately resulted in significantly higher future payments.
• D) Lending authorities initially allowed for the issuance of adjustable rate mortgages but subsequently disallowed them when it "tightened the rules." The new requirement that all mortgages be on a fixed rate basis resulted in the exclusion of many potential new home buyers, thus drying up demand in the residential housing market.

Differentiate between high culture and popular culture, and articulate changes in their perceptions over time.

Understand the role of censorship and self-regulation in media content.

Recognize the active role of media audiences in interpreting and reshaping media content.

Discuss the implications of targeted advertising and media segmentation on consumer behavior and societal values.

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Definitions:

Directive Style

A leadership approach characterized by providing clear expectations, specific directions, and close supervision of tasks and performance.

Specific Guidance

Direct and detailed instructions or advice provided to help someone accomplish a task or improve their performance.

Leadership Grid

A model used in organizational development to evaluate a leader's concern for people versus their concern for production or results.

Team Manager

A leader or supervisor responsible for directing and coordinating the efforts of a group of individuals working towards a common goal.