What is the difference between a private-label and subprime mortgage-backed security? Be sure to mention how they differ in terms of credit enhancement
What will be an ideal response?
The residential mortgage-backed securities (RMBS) market is divided into two sectors: agency MBS and nonagency MBS. RMBS issued in the nonagency MBS market require that credit enhancement be provided to protect against losses from the loan pool. The nonagency MBS market is divided into the private-label MBS market and subprime MBS market. The difference between private-label MBS and subprime MBS is due to the complexity of the structure for dealing with credit enhancement required because of the greater credit risk associated with subprime mortgage loans. Private-label MBS, also referred to as prime or residential deals, are backed by prime mortgage loans; subprime MBS are backed by subprime loans and are commonly classified as part of the asset-backed securities sector and referred to as mortgage-related asset-backed securities.
You might also like to view...
Underallocated overhead occurs when ________.
A) allocated overhead costs are less than actual overhead costs B) actual overhead costs are less than allocated overhead costs C) estimated overhead costs are greater than budgeted overhead costs D) estimated overhead costs are greater than actual overhead costs
Through ________ pricing, a marketer pays for an advertisement based on how many times an advertisement appears on a webpage viewed by users
A) cost per impression B) cost per customer C) cost per order D) cost per click E) cost per conversion
Which of the following organizations has recommended that entities provide a reconciliation to GAAP net income whenever reporting proforma numbers?
a. Auditing Standards Board b. Financial Executives International c. Financial Accounting Standards Board d. Accounting Standards Executive Committee
The greatest degree of control for committed fixed costs is exerted
a. during the life of the investment. b. prior to aquisition. c. by equipment operators. d. in the post-investment audit.