All of the following describe the market for credit default swaps on mortgage-backed securities in the mid-2000s EXCEPT
A) an increasing number of buyers were speculators.
B) AIG apparently underestimated the risk involved with mortgage-backed securities.
C) the volume of credit default swaps was too low making it difficult to assess their value.
D) payments by buyers were too low relative to risk.

Question

Quizplus · Accepted Answer

The volume of credit default swaps was actually very high, reaching over $45 trillion at the peak of the market. The other options accurately describe the market for credit default swaps on mortgage-backed securities in the mid-2000s.

All of the Following Describe the Market for Credit Default