Many Investment Banks Quickly Collapsed When the Housing Market Collapsed

Multiple Choice

Many investment banks quickly collapsed when the housing market collapsed because

A) the Federal Reserve was unwilling to provide them with short-term loans.
B) they ignored the risk assigned by the rating agencies, resulting in leverage ratios that were too low.
C) new regulations required investment banks to maintain more capital against their residential housing loans than was true for commercial business loans.
D) they were highly leveraged and had little reserves on hand to meet the short-term debt obligations of the mortgage-backed securities.