Which of the Following Is True Concerning Loans Sold with Recourse

question 71

Multiple Choice

Which of the following is true concerning loans sold with recourse?

• A)Most loans are sold in this manner.
• B)The buyer cannot put the loan back to the selling FI.
• C)The FI has no explicit liability if the loan eventually goes bad.
• D)The FI that originated the loan retains a contingent credit risk liability.

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Definitions:

Net Profit Margin

A financial metric that shows the percentage of revenue that remains as profit after all expenses, interest, and taxes have been deducted.

FIFO

First In, First Out (FIFO) is an inventory valuation method where goods that are first acquired are the first to be sold, useful in managing inventory and costs.

Nonpoint Pollution

Pollution that originates from multiple and diffuse sources rather than from identifiable or discrete sources, common in agricultural and urban runoff.

Point Pollution

Pollution that can be traced to a single, identifiable source, such as a factory's waste discharge pipe.