Answered

Some argue that the Federal Reserve lowering interest rates from mid-2000 to the end of 2002 greatly increased the money supply; however, opportunities to invest yielded paltry returns leading bankers to offer _____ in order to earn a higher return.

Answer :

fichoh

Answer: Subprime mortgage loans

Explanation: In other earn higher return, subprime mortgage loans provides bankers the opportunity to charge borrowers higher rates on loans offered. This is because subprime mortgage loans are usually offered to credit defaulters. That is, customers with low credit score due to inconsistencies in their credit repayment due to late payment and poor credit history. Due to poor credit score and low tendency to repay borrowed amount, hence posing a high risk of recouping their fund, such borrowers would find it difficult to qualify for conventional mortgage plans. Subprime mortgages offers a lifeline though but at higher rates.

Other Questions