In the Creation of an ABS, Which of the Below

question 15

Multiple Choice

In the creation of an ABS, which of the below statements is FALSE?

• A) An installment sale contract is a loan to the buyer of the assets wherein the buyer agrees to repay the originator of the loan over a specified period of time for the amount borrowed plus interest.
• B) The criteria for granting a loan are referred to as underwriting standards.
• C) The company is granting the loan is referred to as the originator of the loan.
• D) The buyers of the assets will set up a legal entity referred to as a special purpose vehicle (SPV).

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Definitions:

Tolman

A psychologist known for his work on cognitive maps in rats and the concept of latent learning.

Model

An abstract representation or simulation of a real system, process, or concept used to understand, predict, or control its behavior.

Contiguity

The principle that for learning to take place, the stimulus and response should occur close together in time.

Response and Reward

The relationship between performing a specific behavior and receiving a corresponding outcome or reward, crucial in learning and motivation.