Which Statement Is Not True with Respect to Loan Sales

question 42

Multiple Choice

Which statement is not true with respect to loan sales?

• A)Are one way used by FI managers to restructure their balance sheet.
• B)Can change the interest rate sensitivity of the FI's balance sheet.
• C)Can be used to manage the FI's interest rate risk.
• D)None of the listed options are correct.

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Definitions:

Periodic Payment

Payments made regularly (such as weekly, monthly, or annually) towards loans, mortgages, or annuities.

Ordinary Annuity

Consistently equal monetary transfers at each term's end within a finite interval.

Compounded Quarterly

A method where interest is computed on the original amount as well as on the interest that has been added over prior periods, and this calculation occurs quarterly.

Quarterly Payment

A payment or installment made once every three months.