In Simple Terms, the Securitization Process Is

question 15

Multiple Choice

In simple terms, the securitization process is

• A) a way to sell structured investment vehicles (SIVs).
• B) a way to sell accounts receivable by mortgage lenders to public investors.
• C) a way to create high-yield investments with little risk.
• D) a way to sell structured investment vehicles (SIVs), and a way to create high-yield investments with little risk.
• E) All of these are correct.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Direct Method

A cash flow statement presentation that lists specific types of cash receipts and payments, used to reveal actual cash flow activities.

Accounts Receivable

Indicates the funds to be received by a business for credit sales made to customers, reflecting potential income.

Direct Method

A cash flow statement calculation method that lists the major operating cash receipts and payments, showing direct cash flows from operating activities.