The boom in 'sub-prime' lending (which was the source of the GFC)was motivated by the:
A)desire to help low-income minority groups
B)belief that the repayment capacity of borrowers had been misrepresented
C)desire for high risk and return investments
D)belief that housing prices would always rise
E)provision of subsidies by the US government.

Question

Quizplus · Accepted Answer

The boom in sub-prime lending was motivated by the belief that housing prices would always rise. This belief led to a surge in lending to borrowers with poor credit histories and low incomes, who were often unable to repay their loans. The resulting defaults and foreclosures contributed to the financial crisis of 2008.

The Boom in 'Sub-Prime' Lending (Which Was the Source of the GFC)was