When residential real estate values fell sharply from 2006 to 2009, the stocks of financial institutions were hardly impacted at all.

Question

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The stocks of financial institutions were significantly impacted due to their heavy investments in mortgage-backed securities, which lost value as residential real estate prices fell. This led to massive losses and was a key factor in the financial crisis of 2007-2008.

When Residential Real Estate Values Fell Sharply from 2006 to 2009