Which of the Following Is False

question 72

Multiple Choice

Which of the following is false?

• A)Sallie Mae issues securities and uses the proceeds to purchase mortgages.
• B)Fannie Mae and Freddie Mac were put into conservatorship in 2008
• C)Fannie Mae and Freddie Mac have a $2.25 billion line of credit with the U.S. Treasury.
• D)Sallie Mae issues securities and uses the proceeds to purchase student loans.

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Definitions:

Fair Value

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Goodwill

Represents the intangible asset arising when a company acquires another business for more than the fair value of its net identifiable assets.

Equity Method

An accounting technique used when an investing company holds significant influence over the investee but does not have full control over it, involving the recognition of income on the investment based on the investee’s net income.

Unrealized Profits

Profits that have been earned but not yet realized through a transaction, such as an increase in value of an asset that has not been sold.