1. All of these are recognized as important influences in the development of the banking crisis of 2008 and the resulting credit crisis EXCEPT
a. Consumers, especially homeowners, took on too much debt.
b. Too many subprime loans were repackaged and sold as securities.
c. The U.S. government promised to buy unlimited amounts of debt from homeowners.
d. Real estate prices collapsed.
2. Which investment has the least amount of risk?
a. Standard deviation = $450, expected return = $4,500
b. Standard deviation = $600, expected return = $400
c. Standard deviation = $500, expected return = $800
d. Standard deviation = $400, expected return = $5,000