As a result of the US government’s intervention, which of the following is true?

As a result of the US government’s intervention, which of the following is true?
A . The cost of borrowing for Fannie Mae and Freddie Mac should decline because the government will be standing behind their debts and the buying and selling of mortgage debt will continue
B . The cost of borrowing for house buyers will rise because of the risk premium now built into the cost of such a government guarantee
C . The systemic risks still remain in the housing market because it increases the US government’s debt
D . Foreign Central Banks will continue to sell their holdings of Fannie Mae and Freddie Mac securities

View Answer

Answer: A