Which of the Following Is an Advantage of Using Loan-Backed

question 36

Multiple Choice

Which of the following is an advantage of using loan-backed bonds for a bank?

• A)Loans used as collateral for the bonds can be sold before the maturity of the bonds
• B)Loan-backed bonds have longer maturities than deposits
• C)Banks do not have to meet regulatory capital requirements on loans used as collateral
• D)Banks can use fewer loans as collateral than the amount of bonds issued
• E)All the options are advantages of loan-backed bonds

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Definitions:

Breached Duty

The failure to fulfill a legal or ethical obligation, often leading to liability.

Natural Consequences

Outcomes that happen as a result of behavior that are not planned or controlled by anyone.

Negligence Claim

A legal action taken when a person suffers harm due to another's failure to take reasonable care to prevent such harm.

Duty of Care

A legal obligation imposed on an individual requiring adherence to a standard of reasonable care while performing acts that could harm others.