In More Complicated Financing Arrangements, Firms Sell Batches of Receivables

question 2

Multiple Choice

In more complicated financing arrangements, firms sell batches of receivables to a legally separate entity whose sole purpose is to hold the receivables and issue claims on their cash flows. The entity holding the receivables issues securities to investors in return for cash and transfers the cash to the transferor in payment for the receivables.The investors in securities issued by the entity receive payments out of the cash flow from the transferred receivables.Common terminology refers to such an entity as a

• A)special purpose entity.
• B)pass-through entity.
• C)tax shelter.
• D)subsidiary entity.
• E)securitized entity.

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Definitions:

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The principle that an individual's beliefs and activities should be understood by others in terms of that individual's own culture.

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A wide range of mental health conditions that affect mood, thinking, and behavior, including disorders such as depression, anxiety disorders, and schizophrenia.

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The principle that an individual’s beliefs and activities should be understood by others in terms of that individual's own culture.

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