There Are Provisions in Credit Card Receivable-Backed Securities That Require

question 4

Multiple Choice

There are provisions in credit card receivable-backed securities that require ________ of the principal if certain events occur. When ________ occurs, the bond classes are retired sequentially by distributing the principal payments to the specified bond class instead of using those payments to acquire more receivables.

• A) early amortization; late amortization
• B) early amortization; early amortization
• C) late amortization; late amortization
• D) timely payoff; early payoff

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Definitions:

Deposition

the geological process by which sediments, soil, and rocks are added to a landform or land mass.

Unconformity

A joining line between two mismatched rock layers, representative of an era where there was either erosion or a halt in deposition.

Sandstone

A sedimentary rock formed by the compaction and cementation of sand-sized mineral particles or rock fragments.

Conglomerate

A coarse-grained sedimentary rock composed of rounded clasts (rock fragments) cemented by finer-grained materials.