What are credit default obligations

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Question:

a. Use intuitive words to explain what are credit default obligations (CDOs) and credit default swaps (CDSs). 

b. Describe the financial crisis in 2008. When describing, you need to explain subprime mortgages and mortgage backed securities (MBS) and why they could thrive for more than a decade. Depict the roles of home buyers, mortgage bankers, MBS investors, investment banks, insurance companies, credit rating agencies, etc.

c. Finally, explain why derivatives such as CDOs and CDSs had such a destructive power that results in a total financial market meltdown, not only in United States, but worldwide.

Reference no: EM131492650

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