๐Ÿ“ข Too many exams? Donโ€™t know which one suits you best? Book Your Free Expert ๐Ÿ‘‰ call Now!

  • google app store apple app store
  • โœ–

      Question

      Which credit product was used to bundle loans with low

      credit rating and transform them into credit offerings with high credit ratings during the Global Financial Crisis of 2008-09?
      A Credit Default Swaps Correct Answer Incorrect Answer
      B Collateralized Debt Obligations Correct Answer Incorrect Answer
      C Mortgage-Backed Securities Correct Answer Incorrect Answer
      D Adjustable-Rate Mortgages Correct Answer Incorrect Answer

      Solution

      Collateralized Debt Obligations were used to assign higher ratings to securities by creating credit tranches. This can occur even if the underlying securities are not highly rated.

      Practice Next
      ask-question