Savings, Investment Spending, and the Financial System- End of Chapter Problems 16. Sallie Mae is a quasi-governmental agency that packages individual student loans into pools of loans and sells shares of these pools to investors as Sallie Mae bonds. a Sallie Mae's packaging process is called .Compared to a scenario where investors can only buy and sell individual loans, the pooling process results in and for an investor. b. Sallie Mae's actions will cause investors to supply funding to students, creating loans at a interest rate. c. Suppose that a very severe recession hits and, as a consequence, many graduates cannot get jobs and default on their student loans. These defaults will create for investors and cause the bonds to become than expected, leading to loans available at a interest rate.
Savings, Investment Spending, and the Financial System- End of Chapter Problems 16. Sallie Mae is a quasi-governmental agency that packages individual student loans into pools of loans and sells shares of these pools to investors as Sallie Mae bonds. a Sallie Mae's packaging process is called .Compared to a scenario where investors can only buy and sell individual loans, the pooling process results in and for an investor. b. Sallie Mae's actions will cause investors to supply funding to students, creating loans at a interest rate. c. Suppose that a very severe recession hits and, as a consequence, many graduates cannot get jobs and default on their student loans. These defaults will create for investors and cause the bonds to become than expected, leading to loans available at a interest rate.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Savings, Investment Spending, and the Financial System- End of Chapter Problems
16. Sallie Mae is a quasi-governmental agency that packages individual student loans into pools of loans and sells shares of
these pools to investors as Sallie Mae bonds.
a Sallie Mae's packaging process is called
.Compared to a scenario where investors can only buy and
sell individual loans, the pooling process results in
and
for an investor.
b. Sallie Mae's actions will cause investors to supply
funding to students, creating
loans at a
interest rate.
c. Suppose that a very severe recession hits and, as a consequence, many graduates cannot get jobs and default on their
student loans. These defaults will create
for investors and cause the bonds to become
than
expected, leading to
loans available at a
interest rate.
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