Which of the Following Was the Result of the Federal

question 177

Multiple Choice

Which of the following was the result of the Federal Reserve's purchase of mortgage-backed securities in 2009?

• A)MBS interest rates declined, home mortgage rates declined, and the Fed turned a profit on these operations.
• B)MBS interest rates declined, home mortgage rates declined, but the Fed had a loss on these operations.
• C)MBS interest rates increased, home mortgage rates declined, and the Fed turned a profit on these operations.
• D)MBS interest rates increased, home mortgage rates increased, but the Fed had a loss on these operations.

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Definitions:

Accounting Period

The span of time at the end of which a company or organization reports its financial performance and position; typically monthly, quarterly, or annually.

Net Realizable Value

The estimated selling price of goods, minus the costs of their completion and the costs necessary to make the sale.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services rendered on credit.

Allowance for Doubtful Accounts

An estimation of the amount of accounts receivable that is not expected to be collected.