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:

Internal Failure Costs

Costs associated with defects found before the delivery of a product to the customer, such as scrap and rework expenses.

Responsibility Accounting

A system of accounting that segments financial information by areas of responsibility, allowing managers to be held accountable for their areas' financial performance.

Managers

Managers are individuals in an organization responsible for directing and overseeing the work of a group of people towards the achievement of goals.

Residual Income

The income that exceeds the minimum rate of return, often used as a measure of the performance of investment centers within organizations.