When a Mortgage Is Used as Collateral for the Issuance

question 7

Multiple Choice

When a mortgage is used as collateral for the issuance of a mortgage-backed security (MBS) ,the underlying mortgage is said to be "securitized." As of the end of 2010,approximately what percentage of residential mortgage loans in the U.S.was being sold into the secondary market and being used as collateral for the issuance of MBS?

• A)25%
• B)40%
• C)85%
• D)100%

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Definitions:

CICA Handbook

A comprehensive guide published by the Canadian Institute of Chartered Accountants providing accounting standards, guidelines, and procedures.

NFP

Stands for Not-For-Profit, referring to organizations that operate for purposes other than generating profit for owners or shareholders, focusing instead on charitable, educational, or social objectives.

ASPE

Accounting Standards for Private Enterprises, a set of Canadian accounting guidelines for privately owned businesses, providing simpler alternatives to IFRS.

CICA Handbook

The Canadian Institute of Chartered Accountants Handbook, containing standards and guidelines for accounting and auditing practices in Canada.