13-14A Program Under Which the Lender Essentially Performs the Underwriting

question 40

Multiple Choice

13-14.A program under which the lender essentially performs the underwriting program is:

• A) verifications of Indebtedness Program
• B) loan Processing Program
• C) direct Endorsement Program
• D) mortgage Banking Program

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Definitions:

Fat Tails

Refers to the occurrences of extreme movements in stock prices or higher than normal risks in investments, which lead to heavy tails in a probability distribution.

Kurtosis

Measure of the fatness of the tails of a probability distribution. Indicates probability of observing extreme high or low values.

Skewness

A measure of the asymmetry of the probability distribution of a real-valued random variable about its mean.

Tail Risk

Risk of extreme events in the far tail of the probability distribution.