In terms of the financial crisis of 2007 and 2008, what were the factors that led to the mortgage default crisis and how did mortgage defaults affect banks involved in mortgage lending and mortgage investing? .

Q: Why do you think mortgage backed securities paid higher interest rates than other investments like…

A: The economies around the globe tend to focus on their growth and development. There are various…

Q: The Federal Reserve decides to sell bonds and there is a change in the equilibrium bond price. What…

A: Below is the given values: The equilibrium price of $100 bonds  =$96 Money supply = 1 trillion

Q: What happens to interest rates in the market when bond prices fluctuate a lot

A: Bond price:- Bond price can be explained as discounted present value of a bond's anticipated cash…

Q: How did higher returns securities in the secondary mortgage market contribute to the liquidity…

A: The 2008 financial crisis began in earlier years with economical credit and lending of tax standards…

Q: Do you think that the Fed should have bailed out large financial institutions during the credit…

A: The global financial crisis of 2008 was the largest crisis the world has weathered since the great…

Q: What did the McKinnon and Shaw predict about the movements of interest rates once financial markets…

A: We have show that, McKinnon and Shaw predicted that interest rates would rise when it càme to…

Q: what is the formula for the rate on long-term Treasury bonds?

A: Suppose:Amount paid for bond=$10,000Face value=$15,000Counpon rate=$2000

Q: What is the 2008 financial crisis. What are its causes and effects?

A: The 2008 financial crisis was an economic crisis that started in the USA and then spread to the…

Q: What is leverage, and why is it so important in understanding the financial crisis?

A: Leverage: The term leverage refers to the practice of investment by taking loans and borrowings. A…

Q: What do you think prevented the financial crisis of2007–2009 from becoming a depression?

A: The financial crisis of 2007-2008 or the Great Recession was a period of a severe economic downturn…

Q: Some charge that the Crisis of 2008 was caused by the greed of Wall Street firms and other bankers.…

A: The crisis of 2008 was a very serious crisis and the economy all around the world had to face the…

Q: Explain the following statements: "(1) individual financial institutions will generally have…

A: Financial institutions are also known as banking institutions which provides intermediary services…

Q: Explain why a mortgage-backed security becomes riskier when the values of the underlying houses…

A: Mortgage-backed securities are more risky. The cost of borrowing is represented by interest…

Q: Talk about the following BRIEFLY   Mortgage back securities prime rate libor rate

A: What Is Mortgage-Backed Security (MBS)?  A mortgage-backed security (MBS) is a speculation like a…

Q: Identify and explain the main factors that contributed to the financial crisis of 2007-2008.

A: Financial crisis refers to a situation in which investors sell their assets and withdraw their money…

Q: What is the main purpose of financial regulation? What kind of instruments may a government use to…

A: Financial Regulation : Financial Regulation can be defined as a form of regulation, laws or rules…

Q: Discuss the role of government in financial intermediation. Do you think government must be a player…

A: The primary goal of financial intermediation is to facilitate funding between savers and borrowers.…

Q: At the Great Recession of 2008, why would Wall Street buy mortgages of people who had really bad…

A: Wall Street buy mortgages of those people who really have a bad credit rating and no down payment…

Q: Discuss the financial innovation in the mortgage market and how it changed the very nature of…

A: PLEASE FIND THE ANSWER BELOW.   MORTGAGE: The term “mortgage” refers to a loan used to purchase or…

Q: Why do credit spreads risesignificantly during a financial crisis?

A: Credit Spread refers to the difference in the yield obtained on financial fixed income instruments…

Q: Why do bubbles form, and how can they turn into financial crises?

A: When one or more major financial assets, such as stocks, real estate, or oil, lose a significant…

Q: Suppose consumers lose their faith in the banking system, and decide to start stuffing their money…

A: A industry may be a group or network of institutions that provide financial services. The key styles…

Q: ) (i) On April 7th, 2020, Fitch Ratings Inc. downgrades Australia's four biggest banks credit…

A: I) When the fitch rating has downgraded the 4 biggest bank of the Australian economy it will mean…

Q: Using the notions of ex ante and ex post interest rates, explain how could a bank be expecting a…

A: The interest rate is the income earned by the investment from the economy. The interest rate will be…

Q: Briefly describe how the advent of a financial crisis may increase the different categories of…

A: Asset values plummet, firms and individuals are unable to pay their loans, and financial…

Q: List the main function of investment banks in the financial system?

A: Investment banks are the banks that help startup companies to launch. It acts as an intermediary…

Q: Analyse the main mechanisms of credit risk transfer developed by banks between 1970 and 2007. In…

A: Risk transfer among banks started vigorously towards the finish of the twentieth century. To be…

Q: What are the roles of banks in the financial system?

A: Financial markets (such as those in which stocks or bonds are traded), securities (from bank CDs to…

Q: Financial Sector Reforms in Ghana from 2007 to 2020 Impact on the reforms of the economy

A: Empirical data suggest that the economic growth in the African nation of Ghana has been an…

Q: What were the implications of the crisis on the financial industry? (Savings and Loans crisis in the…

A: The Savings and Loan Crisis (S&L) was a long-drawn-out financial crisis. Between 1986 and 1995,…

Q: what do you think are the main reasons that led to the subprime crisis of 2007/ 2008?

A: The 2007-08 financial crisis, known as the subprime mortgage crisis, was a significant outflow of…

Q: During The 2007-2008 financial crisis, Sould government purchase the devalued paper, so that…

A: Devaluation is the reduction in official value of the home currency in terms of other currencies.

Q: How did the securitisation of mortgages and the targeting of sub-prime borrowers contribute to the…

A: Mortgages to high-risk borrowers were expanded, and home prices rose, contributing to a period of…

Q: If bad credit risks are the ones who most actively seek loans, then financial intermediaries face…

A: When the parties involved in any economic activity do not have same or symmetric information about…

Q: Explain any four instruments that the central bank can use to regulate the financial system?

A: Central bank is said to be a financial institution that has the authority to control money supply of…

Q: What do you think were the main causes of the Financial Crisis?

A: In a financial crisis, asset expenses see a steep decline in price, companies and customers are…

Q: How do we restore confidence in the financial and banking industries and our political systems?

A: Introduction: The Industrial Revolution was one of the most significant events in human history,…

Q: Please explain carefully; how did the "call loans" of the 1920s contribute to the severity of the…

A: ANSWER   The economic crisis of 1929 was exacerbated by the crash of stock market. The stock market…

Q: What are the convergence of issues that led to and caused the subprime financial crisis of 2007-2008

A: Financial crisis of 2007-2008, particularly known as mortgage crisis was basically the result of…

Q: What do you think should be done to prevent another global financial crisis?

A: Financial crisis are results from the systemic failures, regulatory absence, pandemic, unanticipated…

Q: What happened the financial crisis of 2008 and 2009 ? what can  do to ensure it does not happen in…

A: The crisis of 2008 was the next biggest economic downturn after the Great Depression of 1929. The…