Multiple choice

What do you mean by Subprime Crisis?

  1. Crisis which arises due to decrease in the number of credit card holders.

  2. Gradual decrease in mortgage delinquencies and foreclosures.

  3. Crisis which arises due to increase in the number of credit card holders.

  4. Gradual increase in mortgage delinquencies and foreclosures.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Subprime Crisis refers to the sharp increase in high-risk mortgage defaults and foreclosures that began in 2007. This led to a global financial collapse as mortgage-backed securities lost value. It was characterized by lending to borrowers with poor credit histories (subprime borrowers).

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