These Entities Worked as Second-Party Consolidators by Purchasing Loans and Reselling

question 2

Multiple Choice

These entities worked as second-party consolidators by purchasing loans and reselling them to investors.

• A)The Federal National Mortgage Association (Fannie Mae)and the Federal Home Loan Mortgage Corporation (Freddie Mac)
• B)Structured investment vehicles (SIVs)
• C)Credit rating agencies
• D)Investment banks
• E)All of the above

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Definitions:

Face Value

The nominal value printed on a bond, currency, or ticket, which may differ from its market value or purchase price.

Rational Investor

An individual who makes investment decisions based on logic and factual analysis rather than emotion or hearsay, aiming to maximize returns while minimizing risks.

Face Value

The nominal value or dollar value printed on a security, such as a bond or stock, which indicates its worth at issuance or maturity.

Interest Payment

A payment made to a lender by a borrower in exchange for the use of borrowed money, typically a percentage of the principal.