Securitization is designed to turn illiquid loans into liquid assets in the form of securities sold in the open market.

Test bank NHTM - CHAP 9

Quiz
•
Mathematics
•
University
•
Easy
Nguyệt Minh
Used 7+ times
FREE Resource
78 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
True
False
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Securitization has the added advantage of generating fee income for banks.
True
False
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Securitized assets cannot be removed from a bank's balance sheet until they mature.
True
False
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Securitization raises the level of competition for the best-quality loans among banks.
True
False
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Servicing rights on loans sold consist of the collection of interest and principal payments from borrowers and monitoring borrower compliance with loan terms.
True
False
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
A loan sold by a bank to another investor with recourse means the bank has given the investor a call option on the loan.
True
False
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
An account party will seek a bank's standby credit guarantee if the bank's fee for issuing the guarantee is less than the value assigned the guarantee by its beneficiary.
True
False
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