One Reason the Housing Bubble Occurred Is Because

question 103

Multiple Choice

One reason the housing bubble occurred is because:

• A) the recency effect caused homes to typically be undervalued.
• B) the herd instinct caused everyone to believe home prices would continue to fall.
• C) securitization removed much of the risk from the sellers of subprime mortgages.
• D) All of these statements are true.

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Definitions:

Drunken Rage

A state of extreme anger and aggressive behavior induced by excessive consumption of alcohol.

Entire Amount

The full or total quantity or sum without deduction or exception.

Insurance Claimed

The process of requesting payment from an insurance company for covered losses or policy benefits.

Legal Standard of Care

The extent of carefulness and precaution demanded from a person obligated to exercise a duty of care.