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 $2000$s$.$ Your professor instructed 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 global 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?

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, financial institutions earned fees and were thus encouraged to continue this process.

These securities were sold to investors across the world. If all went well, home buyers would make their payments and investors would earn their returns. However, a series of mortgage defaults led to the meltdown. Investors who were the indirect lenders to the home buyers didn't receive the expected cash flows, and on top of that, financial institutions skimmed fees during the process.

Summary

Check all that apply.

In the $2000$ s$,$ specialized mortgage brokers were allowed to originate mortgage loans. Earlier mortgage loan originators were Savings & Loan associations $($S&Ls$)$ or banks.

From a borrower's perspective, adjustable$-$rate mortgages $($ARMs$)$ are considered riskier than traditional fixed$-$rate mortgages, because mortgage payments might increase without an increase in income.

Investors across the globe were buying mortgage$-$backed securities for the rate of return that these securities were generating. Most of