All of the Following Are Benefits of Securitization EXCEPT

question 46

Multiple Choice

All of the following are benefits of securitization EXCEPT

• A) risk sharing.
• B) reduced interest rates that borrowers pay on loans.
• C) increased liquidity.
• D) fewer adverse selection problems.

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Definitions:

Budgeted Activity

Planned or expected levels of operational activity, which may include sales volume, production quantities, or labor hours, for budgeting purposes.

Fixed Overhead

Costs that do not change with the level of production or sales over a short period, such as rent, salaries, and insurance.

Budget Variance

The difference between what was budgeted or planned in terms of financial performance or cost, and what was actually achieved.

Labor Efficiency Variance

The difference between the actual labor hours used and the standard hours expected for the level of production achieved.