Which of the following is NOT true about so-called mortgage-backed securities: A. Before the crisis, they were believed by many banks to be a way of reducing loan risks B. Before the crisis, they played a major role in broadening home ownership in America C. They were linkages that spread instability across many financial institutions D. Their use was strongly discouraged by the Federal government

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Social Studies

Rogelio

19 June, 09:33

Which of the following is NOT true about so-called mortgage-backed securities: A. Before the crisis, they were believed by many banks to be a way of reducing loan risks B. Before the crisis, they played a major role in broadening home ownership in America C. They were linkages that spread instability across many financial institutions D. Their use was strongly discouraged by the Federal government

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Vivian Blevins · Answer 1

The correct answer is letter D.

Explanation: Mortgage-backed securities are tradeable assets backed by mortgages. They allowed banks to make more loans.