At the beginning of the financial crisis,banks were hurt by all of the following EXCEPT
A) declines in the value of mortgage-backed securities.
B) defaults on mortgages by those with subprime mortgages.
C) holding too many Treasury bonds.
D) not being repaid on loans to real estate developers.

Question

Quizplus · Accepted Answer

Banks were not hurt by holding too many Treasury bonds. In fact, during the financial crisis, many banks increased their holdings of Treasury bonds as a safe haven asset. The other options listed did contribute to the financial crisis, as declines in the value of mortgage-backed securities, defaults on subprime mortgages, and not being repaid on loans to real estate developers all led to significant losses for banks.

At the Beginning of the Financial Crisis,banks Were Hurt by All