Which of the following statement is false about the lessons for risk managers from the 2007 crisis?

Select one:

A. Investors should not rely on ratings. They should understand the assumptions made by rating agencies and carry out their own analyses.

B. Transparency is important financial markets. If there is a lack of transparency, markets are liable to dry up when there is negative news.

C. Correlations always reduce in stressed markets. In considering how bad things might get, risk managers should not use correlations that are estimated from data collected during normal market conditions.

D. Recovery rates decrease when default rates increase. This is true for almost all debt instruments, not just mortgages.