As the Housing Bubble Began to Burst in 2006-2008,investors Would

Multiple Choice

As the housing bubble began to burst in 2006-2008,investors would only buy mortgage-backed securities at high yields to compensate for higher perceived default risk.As a result

A) banks suffered significant capital losses as the value of their holdings of mortgage-backed securities declined.
B) funds available for mortgages increased.
C) bank profits rose as they earned higher interest on mortgages.
D) the price of mortgage-backed securities tended to rise due to the higher yields.