A Fundamental Problem with Goldman Sachs' GSAMP Trust Was That

question 8

Multiple Choice

A fundamental problem with Goldman Sachs' GSAMP Trust was that:

• A)Loans were given to people with poor credit histories
• B)Homeowners' equity in the securitized mortgages was less than 1 percent on average
• C)Loans were given to people with no income
• D)58 percent of the securitized loans had little or no documentation
• E)All of the above

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Definitions:

Negative Figure

A value less than zero, often indicated in financial statements to represent losses, deficits, or outflows.

Comparative Balance Sheets

Financial statements that provide a side-by-side comparison of a company's financial position at different periods.

Horizontal Analysis

A financial analysis technique that compares historical financial data over a series of reporting periods to identify trends and growth patterns.

Trend Analysis

A method of financial analysis that allows one to predict future movements based on historical data.