In this assignment, you need to watch the movie and then summarize at least 5 financial innovations or deregulations that lead up to the financial crises. This should be between 4-5 pages long in length.
I have provided a link for you that leads directly to the movie for you to be able to watch it.
https://movies2watch.tv/watch-
Requirements: Between 4 – 5 pages long in length
Answer preview
The hedge funds heavily contributed towards the occurrence of the financial crisis. A hedge fund is an investment vehicle other than a particular type of investment. Hedge funds pool money from different investors intending to invest in high-risk, costly, and high-rewarding securities and other investment opportunities (Stempel, 2021). The hedge funds created a high demand for mortgage-backed securities in the country.
The securities were being paired with specific guarantees that were known as default swaps. This was a great idea at the beginning, but things went south when the Fed began to raise the interest rates. This made people with adjustable mortgage rates refuse to pay the increased payments. The securities became worthless, and people could not sell or price them, making companies like the American International Group (AIG). The hedge funds were allowed in the country after the deregulation in 1999, where banks were allowed to operate like hedge funds (Aliber & Zoega, 2019). This caused the financial crisis and the subprime mortgage crisis
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