Loan sales by banks are generally of two types: (a)participation loans;and (b)_________.The term that correctly fills in the blank above is:

Question

Quizplus · Accepted Answer

The blank is asking for the second type of loan sale, and among the given options, only "assignments" is a type of loan sale. Assignment is a process where a bank sells all or a portion of the rights and obligations of a loan to another financial institution or investor. This allows the originating bank to reduce its exposure to risk and increase liquidity, while the buyer of the loan gains access to a diversified portfolio of loans. Therefore, the correct choice is A) assignments.

Loan Sales by Banks Are Generally of Two Types: (A)participation