Economy Discussion Question

Why did housing prices rise rapidly during 2002 – 2005?

Why did the mortgage default rate increase so sharply during 2006 and 2007 even before the 2008 – 2009 recession began?

Explain how a bond’s interest rate can change over time even if interest rates in the economy do not change.

What is the primary risk of trading in the fed funds markets? How did this risk come into play during the financial crisis of 2008-2009?

Requirements:

1. Your assignment should be 3 – 4 pages in length and written in APA style format.
2. Separate title and reference page (minimum of 3 or 4 reference)
3. Double spaced with 12 point Times Roman font and 1” by 1.5” margins.
4. Paraphrasing of content – Demonstrate that you understand the case by summarizing the case in your own words. Direct quotes should be used minimally.