What is a mortgage-backed security?
A) A bundled group of home mortgages
B) A bundled group of investments with AAA credit-ratings
C) A bundled group of bonds
D) A bundled group of stocks
E) A bundled group of loans made to risk assessment firms
Answer: A
Explanation: A) Financial institutions bundle home mortgages into packages and resell them as securities to eager investors who trusted in the securities' risk ratings given by Moody's, Standard & Poor's, and Fitch. Each MBS is a group of mortgages bundled together to form a debt obligation (a bond) that entitles the holder (the investor) to the cash that flows in from the mortgages.
You might also like to view...
The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the Petty Cash account
Indicate whether the statement is true or false
The ethical norms that influence a judge's decision can be determined by ________
A) stating the conclusion B) inferring from the court's reasoning C) stating the facts of the case D) changing the analogy
Dan, a widower, dies intestate. He leaves two surviving children, Joe and Carrie, and two grandchildren who are children of his deceased daughter, Debra. If Joe and Carrie each take one-third of his estate and the grandchildren each take one-sixth of the estate, this is described legally by the statement that:
a. lineal descendants of predeceased children take property per stirpes. b. lineal descendants take the property per capita. c. collateral heirs take the property per stirpes. d. lineal descendants and collateral heirs take the property per capita.
Combating public corruption at all levels is one of the priorities of the:
a. U.S. Social Security Administration. b. U.S. Department of Justice. c. U.S. Department of Labor. d. Federal Bureau of Investigation.