When an Issuer of Securitized Loans Includes a Standby Letter

question 68

Multiple Choice

When an issuer of securitized loans includes a standby letter of credit with the securitized loans,they are providing an:

• A)internal credit enhancement.
• B)external credit enhancement.
• C)internal liquidity enhancement.
• D)external liquidity enhancement.
• E)None of the options is correct.

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Definitions:

Genetic

Pertaining to genes and heredity, explaining how traits and characteristics are passed from parents to offspring.

Contingency

A term used to describe the relation between behaviors and their antecedents and consequences.

Behavior

The observable actions or responses of individuals or groups to internal stimuli or external environments.

Potent Reinforcers

Highly effective incentives or rewards that significantly influence behavior.