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If a Bank Sells a Mortgage Portfolio at a Price

Question 112

Multiple Choice

If a bank sells a mortgage portfolio at a price that yields the purchasers a return that is lower than that yielded,on average,by the mortgages in the portfolio,the selling price


A) is equal to the carrying value of the mortgages on the bank's books.
B) is lower than the carrying value of the mortgages on the bank's books.
C) is higher than the carrying value of the mortgages on the bank's books.
D) cannot be determined by examining the carrying value of the mortgages on the bank's books because the selling price is determined purely by the market.

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