Close Window A Moving to another question will save this response. Question 6 of 15 uestion 6 12 points In the early-to-mid 2000s, interest rates on house payments were actually quite low. More and more people with struggling credit were able to qualify for subprime mortgages with manageable rates. Housing prices were rising rapidly, and the number of subprime mortgages given out was rising even more. However, by the end of 2006, the speculative bubble in the U.S. housing market burst and more than 9 million Americans would lose their home, millions more suffered from stress and anxiety of not being able to make their mortgage payments. In addition, nearly 25% of all US homes had negative equity as the value of the house was lower than the mortgage on the house. Save Answer (4 marks) Required: a. Based on the subprime crisis, analyze how the prospect theory can explain speculative bubbles. b. Analyze the connection between the housing bubble and credit expansion (4 marks) Analyze the effects of Housing Bubble respectively on homebuyers' incentives and on lenders' incentives. (4 marks) C. Arial 3 (12pt) T-E- E. MacBook R E o