Which of the Following Statements Regarding Subprime Mortgages Is TRUE

Multiple Choice

Which of the following statements regarding subprime mortgages is TRUE?

A) Subprime mortgages are not Ginnie Mae guaranteed,so CMO investors are exposed to default risk
B) Subprime mortgages are not Ginnie Mae guaranteed,so securities backed by subprime mortgages cannot be issued
C) CMOs backed by subprime mortgages cannot be used as collateral for CDOs
D) Due to diversification,securities backed by subprime loans are of no more risk than those back by prime loans