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With reference to the subprime meltdown, consider the following statements:
1. The subprime meltdown was the sharp increase in high-risk mortgages that went into default beginning in 2007.
2. The subprime meltdown led to the financial crisis, the Great Recession, and a massive sell-off in the equity markets.  
Which of the statements given above is/are correct?
  • a)
    1 only
  • b)
    2 only
  • c)
    Both 1 and 2
  • d)
    Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
With reference to the subprime meltdown, consider the following statem...
The world’s stock and bond markets are closely watching China Evergrande Group , a Chinese property developer that is on the brink of missing payments on some of its debt.
  • If not resolved, it threatens to become the largest debt default by a company in Asia, which could jolt investor confidence across markets globally.
  • Beijing seems reluctant to bail out the company but is taking steps to limit the damage.
  • Evergrande is an enormous—and heavily indebted—private-sector Chinese property developer and home builder that is close to defaulting on some of its billions of dollars in debt.
  • The most urgent immediate deadline is Sept. 23, when the company has an $83.5 million interest payment due on some of its dollar-denominated bonds.
The subprime meltdown was the sharp increase in high-risk mortgages that went into default beginning in 2007. The housing boom of the mid-2000s, along with low-interest rates, led many lenders to offer home loans to borrowers with poor credit. When the real estate bubble burst, many borrowers were unable to make the payments on their subprime mortgages. The subprime meltdown led to the financial crisis, the Great Recession, and a massive sell-off in the equity markets.  
Hence both statements are correct.
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Community Answer
With reference to the subprime meltdown, consider the following statem...
The world’s stock and bond markets are closely watching China Evergrande Group , a Chinese property developer that is on the brink of missing payments on some of its debt.
  • If not resolved, it threatens to become the largest debt default by a company in Asia, which could jolt investor confidence across markets globally.
  • Beijing seems reluctant to bail out the company but is taking steps to limit the damage.
  • Evergrande is an enormous—and heavily indebted—private-sector Chinese property developer and home builder that is close to defaulting on some of its billions of dollars in debt.
  • The most urgent immediate deadline is Sept. 23, when the company has an $83.5 million interest payment due on some of its dollar-denominated bonds.
The subprime meltdown was the sharp increase in high-risk mortgages that went into default beginning in 2007. The housing boom of the mid-2000s, along with low-interest rates, led many lenders to offer home loans to borrowers with poor credit. When the real estate bubble burst, many borrowers were unable to make the payments on their subprime mortgages. The subprime meltdown led to the financial crisis, the Great Recession, and a massive sell-off in the equity markets.  
Hence both statements are correct.
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With reference to the subprime meltdown, consider the following statements:1. The subprime meltdown was the sharp increase in high-risk mortgages that went into default beginning in 2007.2. The subprime meltdown led to the financial crisis, the Great Recession, and a massive sell-off in the equity markets.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?
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