25-77 Loan sales do not completely protect the lending FI from credit risk exposure because
A) defaults may reduce the ability of the lending bank to sell loans in the future.
B) a loan sale contains an implicit quality guarantee by the lending FI.
C) loans are always sold with recourse.
D) regulators require the lending FI to make restitution for defaulted loans.
E) loan sales force the FI to mark its loans to market.
Correct Answer:
Verified
Q70: 25-69 The major buyers of U.S.domestic loans
Q71: 25-67 The traditional interbank loan sale market
Q72: 25-66 Which of the following rely on
Q73: 25-65 Which observation is true of vulture
Q74: 25-74 Which legislation authorizes federal agencies to
Q76: 25-62 A type of FI company that
Q77: 25-72 The principal objective in the creation
Q78: 25-78 The growth of the commercial paper
Q79: 25-68 Vulture funds are
A)management consulting firms that
Q80: 25-79 Loan sales by foreign banks
A)are forbidden
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents