Which of the following correctly describes the role of the bond-rating agencies in the subprime mortgage asset

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Which of the following correctly describes the role of the bond-rating agencies in the subprime mortgage asset bubble?

a. The bond-rating agencies warned early on that subprime mortgages were going to have a high level of default.

b. The bond-rating agencies gave high ratings to assets backed by subprime mortgages, thus encouraging the growth of the asset bubble.

c. The bond-rating agencies informed government regulators, but not the general public, of the high level of default risk of subprime mortgages.

d. All of these.

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Money, Banking, Financial Markets and Institutions

ISBN: 978-0538748575

1st edition

Authors: Michael Brandl

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Question Posted: Jun 21, 2019 07:40 AM

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Which of the following correctly describes the role of the bond-rating agencies in the subprime mortgage asset

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b The bondrating agencies ...View the full answer

Money, Banking, Financial Markets and Institutions

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