Attempts 2.3\ Keep the Highest

(2.3)/(6)

\ 10. Global economic crisis\ One of the most discussed topics in finance recently is the global economic crisis that is said to have begun in the 2000s. Your professor instructec your team to write an article for the college newspaper. Your friend has written the first draft of the article, which captures the essence of the glob economic crisis. She has left some important points for you to review and has asked you to check the summary.\ Which statements-belong in the summary?\ The Global Economic Crisis\ Mortgage originators issued mortgages to home buyers and sold these mortgages to securitizing firms. These firms bundled these mortgages into pools and created securities that were backed by the mortgage payments. A portion of these pools were called tranches. Groups of tranches were further combined and then divided again into more complex securities called collateralized debt obligations (CDOs). These securities were redivided and recombined to create even more complex securities called CDOs-squared.\ This process had important implications: (1) The total risk embedded in the mortgages did not change; (2) since the risk was spread amongst several CDOs, it was difficult to assess the risk in each CDO; and (3) during the process of securitization and resecuritization,\ Summary\ Check all that apply.

10. Global economic crisis One of the most discussed topics in finance recently is the global economic crisis that is said to have begun in the 2000s. Your professor instructec your team to write an article for the college newspaper. Your friend has written the first draft of the article, which captures the essence of the glob economic crisis. She has left some important points for you to review and has asked you to check the summary. Which statements belong in the summary? The Global Economic Crisis Mortgage originators issued mortgages to home buyers and sold these mortgages to securitizing firms. These firms bundled these mortgages into pools and created securities that were backed by the mortgage payments. A portion of these pools were called tranches. Groups of tranches were further combined and then divided again into more complex securities called collateralized debt obligations (CDOs). These securities were redivided and recombined to create even more complex securities called CDOs-squared. This process had important implications: (1) The total risk embedded in the mortgages did not change; (2) since the risk was spread amongst several CDOs, it was difficult to assess the risk in each CDO; and (3) during the process of securitization and resecuritization