One Difference Between a Special Purpose Vehicle (SPV) and a Structured

question 85

Multiple Choice

One difference between a special purpose vehicle (SPV) and a structured investment vehicle (SIV) is

• A)there is no difference; these are just two different names for the same type of subsidiary.
• B)the SPV has stockholders that share in the profits; the SIV only has debt.
• C)the SIV ceases to exist when the loans in its portfolio cease to exist; the SPV outlives its loan portfolio.
• D)the SPV is allowed to accept deposits while the SIV must rely solely on other borrowings.
• E)the SIV raises funds first and then acquires loans from the sponsoring FI; the SPV receives the loans first and creates an asset-backed security which it sells and transfers the funds back to the sponsoring FI.

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Definitions:

Net Present Value

A method used to evaluate the profitability of an investment, calculating the difference between the present value of cash inflows and outflows over a period.

Project

An organized task or set of activities with a start and end date, aimed at achieving a specific goal or creating a unique product, service, or result.

Net Present Value

The disparity between the current value of incoming cash and the current value of outgoing cash over a certain timeframe.

Salvage Value

The estimated residual value of an asset at the end of its useful life, often considered for depreciation calculations.