Choose the Correct Answer

question 69

Multiple Choice

Choose the correct answer:

• A)While pass-throughs and CMOs remain on banks and building societies balance sheets, mortgage-backed bonds (MBBs) remove mortgages from balance sheets as forms of off-balance-sheet securitisation.
• B)While pass-throughs and CMOs help banks and building societies remove mortgages from their balance sheets as forms of off-balance-sheet securitisation, mortgage-backed bonds (MBBs) normally remain on the balance sheet.
• C)Pass-throughs and CMOs are the same as mortgage-backed bonds (MBBs).
• D)None of the listed options are correct.

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Definitions:

Perfectly Competitive

A market structure characterized by many sellers and buyers, homogeneous products, no barriers to entry or exit, and perfect information, leading to optimal allocation of resources.

Market Price

The present cost at which a service or asset is available for purchase or sale on the market.

Marginal Cost

The financial outlay for creating an additional unit of a good or service.

Supply Curve

The supply curve is a graphical representation that shows the relationship between the price of a good and the quantity of the good that producers are willing to supply.