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QUESTION 6. [1 point] Following figure shows the fraction of loans issued (vertical axis) vs. the ratio of loan size to Jumbo-Loan cutoff (horizontal axis).

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QUESTION 6. [1 point] Following figure shows the fraction of loans issued (vertical axis) vs. the ratio of loan size to Jumbo-Loan cutoff (horizontal axis). Where is the screening of borrowers by bank likely to be the wcakest? a. At very large value near 3 d. It is the same everywhere. b. Just below 1 c. Just above 1 0.09 0.08 0.07 0.06 0.05 - 0.04 0.03 0.02 0.01 0 0 02 04 06 24 26 28 0.8 1 12 14 16 18 2 22 Ratio of Loan Size to Jumbo-Loan Cutoff 3 QUESTION 6. [1 point] Following figure shows the fraction of loans issued (vertical axis) vs. the ratio of loan size to Jumbo-Loan cutoff (horizontal axis). Where is the screening of borrowers by bank likely to be the wcakest? a. At very large value near 3 d. It is the same everywhere. b. Just below 1 c. Just above 1 0.09 0.08 0.07 0.06 0.05 - 0.04 0.03 0.02 0.01 0 0 02 04 06 24 26 28 0.8 1 12 14 16 18 2 22 Ratio of Loan Size to Jumbo-Loan Cutoff 3

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