Question

During the period of 1986-1995 the failures at savings and loan institutions were caused by:__________

A. Creating cookie jar reserves
B. Stealing $300 million from shareholders
C. Engaging in a Ponzi scheme
D. questionable home mortgage loans and risky investments

Answer 1

Answer: D.) Questionable home mortgage loans and risky investments.

Explanation: The failure of the Savings and Loan institution could be attributed to a number of reasons which includes low economic growth due to mortgage scheme offered on saving and loan account system which was aimed at helping or assisting the working class own a house. The scheme insured these mortgages and charges low interest rate on the mortgage, as the interest rate on savings and loan accounts was also low. The savings and loan deposit couldn't invest in commercial or real estate or business development. The risky insurance and mortgage loans which failed to charge lower than average interest rate,huge insurance on mortgage and inflation were pivotal in the failure of the Savings and Loan institution during that period.

Answer 2

D. questionable home mortgage loans and risky investments.

Step-by-step explanation:

A savings and loan institution is a financial institution that generally accepts savings deposits and makes mortgage, house, land, car and other personal loans to its customers.

During the period of 1986-1995, the failures at savings and loan institutions were caused by questionable home mortgage loans and risky investments.