Which of the Following Observations Is NOT Correct

question 79

Multiple Choice

Which of the following observations is NOT correct?

• A)Most loans are sold with recourse.
• B)Loan sales are a primitive substitute for securitization.
• C)Selling of a loan creates a secondary market for loans.
• D)Ownership of the loan is always transferred to the loan purchaser.
• E)Loan sales do not involve the creation of new types of securities.

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Definitions:

Keynesian Economist

An economist who believes in Keynesian economics, which advocates for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of depression.

Savings

Money that is put aside for future use rather than spent immediately, often in accounts that yield interest.

Interest Rates

The percentage of a loan charged as a cost of borrowing or paid as a part of return on savings, typically expressed as an annual percentage of the principal.

Classical Economists

A group of economists in the late 18th and early 19th centuries who believed in the theory that markets function best without government intervention.