Which of the Following Best Describes the Benefits to the Borrower

question 28

Multiple Choice

Which of the following best describes the benefits to the borrower of selling asset backed securities?

• A) due to the portfolio effect, the borrower can package up low quality accounts receivable and sell them for a premium price
• B) the borrower trades current cash flows for future cash flows
• C) the asset-backed security may carry a better credit rating
• D) none of the answers is correct

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Definitions:

Communist Countries

Nations that practice communism, a political and economic ideology characterized by the collective ownership of property and the organization of labor for the common advantage of all members.

Soviet Union

The Soviet Union, officially the Union of Soviet Socialist Republics (USSR), was a socialist state in Eurasia that existed from 1922 to 1991.

Das Kapital

A foundational theoretical text in communist philosophy, economics, and politics, written by Karl Marx, which critiques the economic systems of capitalism.

Adam Smith

A Scottish economist and philosopher known as the "father of economics" and the author of "The Wealth of Nations," which laid the foundation for classical economics.