Which of the Following Is NOT a Factor That May

question 33

Multiple Choice

Which of the following is NOT a factor that may tend to increase loan sales in the future?

• A)There is an increased trend to apply credit ratings to loans offered for sale, increasing the attractiveness to secondary market purchasers.
• B)The federal government takeover of Fannie Mae and Freddie Mac means that the loans held by these agencies can never be sold to other entities.
• C)Because of their special credit monitoring skills, FIs have a comparative advantage in making loans to below-investment grade companies and then selling the loan.
• D)The trend toward marked-to-market accounting for assets makes bank loans more like securities so they may be easier to sell.
• E)The risk-based capital requirements of the Bank for International Settlements give banks a strong incentive to sell commercial loans to decrease their amount of risky assets.

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Definitions:

Trade or Business

Activities conducted for the purpose of income or profit, engaged in consistently and regularly to qualify as deductible business expenses.

Copyright

Legal protection given to creators of original works, including the right to copy, distribute, and adapt the creation.

Schedule D

A tax form used to report capital gains and losses incurred during a specific year.

Form 4797

A tax form used to report the sale or exchange of business property.