The 2007-2008 financial crisis began with:
A)hedge funds not being able to pay back their long-term loans.
B)commercial banks losing their bank capital.
C)a sharp increase in the federal funds rate.
D)defaults on subprime mortgages.

Question

Quizplus · Accepted Answer

The 2007-2008 financial crisis began with defaults on subprime mortgages. These mortgages were given to homebuyers with poor credit scores and a high risk of defaulting on their loans. The subprime mortgage market eventually collapsed, leading to significant losses for banks and investors who had invested in these risky loans. This sparked a chain reaction that ultimately led to the global financial crisis.

The 2007-2008 Financial Crisis Began With