After 2000 the market for mortgage-backed securities grew rapidly because economists claimed they had a model that could predict the risk associated with them.

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Quizplus · Accepted Answer

This is generally true. The development of mathematical models allowed investors to quantify and manage the risk associated with mortgage-backed securities, leading to a rapid expansion of the market in the early 2000s. However, it should be noted that these models ultimately proved to be flawed and contributed to the 2008 financial crisis.

After 2000 the Market for Mortgage-Backed Securities Grew Rapidly Because