Which of the following refers to packages of mortgages bundl

Which of the following refers to packages of mortgages bundled together that are then sold to investors? O Leverage O Mortgage-backed securities O Subprime loans O Hybrid Suppose the following graph illustrates the initial demand and supply curves in the housing market. Show the effect of an increase in interest rates on the demand for houses in the housing market Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. Su Demand Supply QUANTITY (Houses) An increase in interest rates w lead to in the prices of houses. Which of the following events contributed to the financial crisis of 2008? Check all that apply The Federal Reserve responded to the 2001 recession with an expansionary monetary policy. Mortgage companies lowered the standards for loan applications and made loans to high-risk borrowers Many low-income borrowers relied on the appreciations in housing prices to refinance their loans

Solution

The correct answer is D. These are mortgages bundled together sold to investors. The correct answer is D.

An increase in interest rates will mean that the demand for housing will fall and so the demand curve will shift leftwards causing a fall in the demand for loans.

An increase interest rates will mean that the demand for housing will fall as loans become more expensive and so the price of housing will fall as the demand curve shifts leftwards.

The correct answers are B and C.