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How Did Subprime Mortgage Defaults Affect the Insurance Market

Question 30

Multiple Choice

How did subprime mortgage defaults affect the insurance market?


A) Insurance companies suddenly owned lots of almost worthless houses.
B) Insurance companies that issued credit default swaps no longer had the reserves they needed to pay claims.
C) Banks lost money, but insurance companies were unaffected.
D) Policyholders saw their premiums increase to cover the losses.

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