Subprime Mortgage and its Impact on the Housing Market Quiz
Explore the subprime mortgage crisis: its causes, impact on housing market, financial institutions affected, and regulatory responses.
#1
What is a subprime mortgage?
A mortgage offered to borrowers with excellent credit scores
A mortgage offered to borrowers with poor credit scores
A mortgage with low interest rates
A mortgage without a down payment
#2
When did the subprime mortgage crisis occur?
#3
What contributed to the subprime mortgage crisis?
Rising unemployment rates
Decrease in housing prices
Widespread issuance of risky mortgages
Government intervention
#4
How did the subprime mortgage crisis impact the housing market?
Increased demand for housing
Decreased demand for housing
Stabilized housing prices
No impact on the housing market
#5
What is a collateralized debt obligation (CDO)?
A type of savings account
A financial product backed by mortgage-backed securities
A loan provided by the government
An insurance policy for mortgages
#6
What role did credit rating agencies play in the subprime mortgage crisis?
They accurately assessed the risk of mortgage-backed securities
They overrated the risk of mortgage-backed securities
They had no involvement in the crisis
They refused to rate mortgage-backed securities
#7
What is predatory lending in the context of subprime mortgages?
Lending practices that exploit borrowers with low creditworthiness
Lending practices that offer favorable terms to all borrowers
Lending practices that prioritize borrowers with excellent credit scores
Lending practices that comply with all regulations
#8
Which financial institution filed for bankruptcy during the subprime mortgage crisis?
Lehman Brothers
Goldman Sachs
JPMorgan Chase
Bank of America
#9
What were some consequences of the subprime mortgage crisis?
Global recession
Stable financial markets
Decrease in unemployment rates
Increase in housing affordability
#10
Which government program was established to help homeowners avoid foreclosure during the subprime mortgage crisis?
Home Affordable Modification Program (HAMP)
Subprime Mortgage Relief Initiative (SMRI)
Foreclosure Avoidance Assistance Program (FAAP)
Mortgage Assistance Relief Services (MARS)
#11
What is the role of the Federal Reserve in addressing the subprime mortgage crisis?
Providing loans to struggling homeowners
Setting monetary policy to stabilize the economy
Regulating mortgage lenders
Enforcing consumer protection laws
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