Dr. Bernanke argued two problems contributing to the financial crisis included:
A banks reliance on long-term funding; and the increased use of non-standard mortgages such as
Adjustable Rate Mortgages ARMS.
B banks reliance on short term funding; and the increased use of non-standard mortgages such as
Adjustable Rate Mortgages ARMS.
C banks reliance on short term funding; and the increased use of non-standard mortgages such as
fixed rate, 30-year mortgages.
D banks reliance on long-term funding; and the increased use of non-standard mortgages such as
fixed rate, 30-year mortgages.
Solution
Answer is A. Adjustable rate mortgages simply became a nightmare. Shadow banks depended on
long term funds.
Dr. Bernanke argued two problems contributing to the financial crisi.pdf
1. Dr. Bernanke argued two problems contributing to the financial crisis included:
A banks reliance on long-term funding; and the increased use of non-standard mortgages such as
Adjustable Rate Mortgages ARMS.
B banks reliance on short term funding; and the increased use of non-standard mortgages such as
Adjustable Rate Mortgages ARMS.
C banks reliance on short term funding; and the increased use of non-standard mortgages such as
fixed rate, 30-year mortgages.
D banks reliance on long-term funding; and the increased use of non-standard mortgages such as
fixed rate, 30-year mortgages.
Solution
Answer is A. Adjustable rate mortgages simply became a nightmare. Shadow banks depended on
long term funds
