Which of the Following Best Describes the Benefits to the Borrower

question 21

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 future cash flows for current cash flows.
• C) The asset-backed security is likely to carry a high credit rating of AA or better.
• D) The borrower trades future cash flows for current cash flows and the asset-backed security is likely to carry a high credit rating of AA or better.

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Definitions:

Quarantining

The placement (by antivirus software) of a computer virus in a secure area on the hard drive so that it won’t spread infection to other files.

Antivirus Software

Software specifically designed to detect viruses and protect a computer and files from harm.

Infected File

A file that has been tainted with a virus or malware, posing a risk to computer security and user data.

Multi-Partite

Pertaining to or involving multiple parties, sides, or factions, often used in the context of graphs or agreements.