Securities like mortgage backed securities and credit default swaps
A: Decreased systemic risk by reducing individual institution's risk exposure.
B: Increased systemic risk in the financial system by exposing large swaths of the financial sector to mortgage risk.
C: Were outlawed after the 2008 financial crisis.
D: Are designed to increase the risk exposure of individual financial institutions via diversification.
Choose the best answer to complete this sentence: "Prior to the financial crisis..."
A: Asset price bubbles formed in both mortgage-backed securities and the housing market.
B: Several regulations were enacted in an attempt to constrain the growth of mortgage-backed securities.
C: It was relatively difficult for borrowers to obtain mortgages.
D: An asset price bubble formed in the housing market.