Explain what is meant by a residential mortgage-backed security
What will be an ideal response?
By a residential mortgage-backed security (RMBS), we mean a security that is created when residential mortgages are packaged together to form a pool of mortgage loans and then one or more debt obligations are issued backed by the cash flow generated from the pool of mortgage loans. "Backed" means that the principal and interest due to the investors in an RMBS come from the principal and interest payments made by the borrowers whose loans are part of the pool of mortgages. A mortgage loan that is included in an RMBS is said to be securitized, and the process of creating an RMBS is referred to as securitization.
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The cost of a nonmonetary asset acquired in exchange for another nonmonetary asset is the fair value of the new asset acquired
Indicate whether the statement is true or false
The method of accounting that only recognizes expenses when cash is paid for expenses incurred is called
a. the accrual basis of accounting; b. revenue and expense accounting; c. the cash basis of accounting; d. the merchandise basis of accounting; e. the commercial basis of accounting
A convenience store ________
A) markets to segments comprised mostly of white-collar workers B) stocks narrow product lines that have wide, deep assortments C) carries a limited line of high-turnover goods for consumer self-service D) involves high operation costs due to full-service customer assistance E) is a multi-channel food and discount retailer that targets niche markets
Both capital and operating expenditures can be depreciated
Indicate whether the statement is true or false