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The Rise and Fall of Subprime Mortgages This reading,  "The Rise and Fall of Subprime Mortgages."  provides a thorough  introduction to subprime mortgages and the problems they have created in  financial markets. It discusses the traditional mortgage market, the growth of  nontraditional (subprime) mortgages as a share of new mortgages during this  decade, the risks of subprime lending, the downturn in the housing market, and  the problems experienced by financial institutions that invested in securities  backed by subprime mortgages. It also considers the macroeconomic effects of  the housing downturn and possible monetary policy responses that might  mitigate them. 1. Define the following terms used in the reading: a. prime mortgage b. jumbo mortgage c. subprime mortgage d. default risk e. near-prime mortgage f. credit scoring g. residential mortgage-backed securities (RMBS)
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This note was uploaded on 12/08/2011 for the course ENGINEERIN 101 taught by Professor Siggabeinteins during the Spring '11 term at Uni. Reykjavik.

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