What caused the CDOs to lose their value?

answer
The correct answer is 1. CDOs, or collateralized debt obligations, were tied in value to the value of the mortgages they were collateral for. When the mortgages lost value because people started to default on their payments, the CDOs lost value.
Part of the course

Try it out

This question is part of our Principles of Finance course.

00:00
00:00

Pick a plan that suits you the best!

Monthly Subscription

$12/month
(billed monthly)

Annual Subscription

$5/month 
(billed annually)

All our plans includes:

  • High quality audio lessons
  • Lesson summaries
  • Interactive questions
  • Learn & Earn
  • Flashcards
  • Lesson transcripts
  • Learning community