When a Borrower Pledges Financial Assets as Collateral for a Bond

question 87

Multiple Choice

When a borrower pledges financial assets as collateral for a bond it is called a(n)

• A) mortgage bond.
• B) equipment trust certificate.
• C) mortgage pass-through security.
• D) collateral trust bond.
• E) collateralized mortgage obligation (CMO).

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Definitions:

Land

A natural resource or property without buildings that is regarded as an asset on a balance sheet, representing the ground on which any structures or improvements can be made.

Balance Sheet

A financial statement that presents a snapshot of a company's financial position, including assets, liabilities, and shareholders' equity at a specific point in time.

Construct

In a financial or accounting context, "construct" could refer to the process of building or developing financial models, budgets, or forecasts.

Warehouse

A large building where goods are stored before they are distributed to stores or consumers.