26-65 Which of the Following Is an Incentive to Securitize

question 71

Multiple Choice

26-65 Which of the following is an incentive to securitize mortgage assets?

• A)To reduce the regulatory tax burden on the FI.
• B)To adjust the gap exposure of the FI.
• C)To improve the liquidity of the FI.
• D)To generate non-interest sensitive fee income.
• E)All of the above.

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Definitions:

Shutting Down

The short-run decision by a firm to cease production due to market conditions, though it may resume operations in the future.

Variable Cost

Costs that vary in proportion to the level of production or business activity.

Total Revenue

The full amount of income generated by the sale of goods or services before any expenses are subtracted.

AVC Curve

The Average Variable Cost (AVC) Curve graphically represents how the cost per unit changes as the level of output is altered, typically showing a U-shaped curve due to economies and diseconomies of scale.