Q45 Which of the following contributed to the boom in subprime mortgage lending before the financial crisis of 2007-2009? 1. Many mortgage lenders sharply eased credit standards because they did not plan to hold the loans in their portfolios. 2. A widespread belief that house prices would keep rising convinced lenders, investors, and borrowers that the loans could be repaid. 3. The creation of complex securities such as CMOs and CDOs that could be sold to investors in the U.S. and abroad allowed lenders to securitize more subprime loans.

Group of answer choices

1 and 3

1, 2, and 3

2 and 3

1 and 2