1. Why did AIG need to be bailed out by the US government? (500 Words)

In this question you will need to do some research into the types of transactions that AIG made, their reason for making those trades and evaluate how that affected their performance in the recession. Your main sources here will most likely be news media from reputable sources.

2. Why did Lehman Brothers go bankrupt? Why do you think they were not bailed out by the US government? (500 Words)

Like the first question, you will need to look into the decisions that the company made going back to the early 2000s and perhaps before. However, here you will most likely need to provide some explanation of the securitisation process and how it contributed to the bankruptcy of the company. Here your main sources will be reputable news media but also may require some reference to academic sources in explaining securitisation.

3. What was the role of credit ratings agencies in the crisis? (500 Words)

Many mortgage backed securities were rated at AAA but contained a lot of loans of sub prime quality. Did the agencies make a mistake? Was it deliberate? How did this contribute to the crisis? News sources will be good references here, however, you will also need to look into some academic sources to explain mortgage backed securities and the credit ratings process.

4. Do you think credit default swaps are a positive thing for the market/society? Why/why not? (500 Words)

In class we went over some arguments for and against CDS. It is now your job to go into more detail and make an argument for or against the legality of CDS. In your answer you will have discuss their effect on the market and subsequently, society.

You will need to use news sources as well as academic references here to do well.

 Marking Breakdown

Each question is worth 2.5% of your grade, making 10% in total. The remaining 5% will be divided into presentation (2.5%) and quality of sources (2.5%). This sums to 15%. Wikipedia and Investopedia are not acceptable sources. They may, however, be good places for you to start your research. I have suggested previously that you use the UQ Harvard referencing style a description of which can be found here:

 https://guides.library.uq.edu.au/referencing/uqharvard

For each question your answer will be marked on the following scale: