The relationship between the borrower and appraiser is not discussed in the reading.
　　A. Arranger does not perform adequate due diligence on the asset manager.
　　B. Arranger securitizes the lower quality mortgages.
　　C. Originator has better information than the borrower.
　　D. Investors do not understand the investment strategy of the asset manager.
　　Answer:B
　　The arranger has better information about the individual mortgages and may retain the higher quality mortgages and pool the lower quality ones. The asset manager performs the due diligence on the arranger. The borrower has better information than the originator. Investors not understanding the investment strategy of the asset manager describe a moral hazard problem.