The near demise of American International Group (AIG) in 2008 was caused by AIG's issuance of a complex derivative.This derivative guaranteed mortgage-backed securities held by investors.As the real estate market collapsed,AIG was required to post billions of dollars of collateral that it did not have.What were the derivative loan guarantees issued by AIG called?
A) real estate investment trusts
B) collateralized mortgage obligations
C) catastrophe put options
D) credit default swaps
Correct Answer:
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