Which One of the Following Forms of Securitization Is Usually

question 29

Multiple Choice

Which one of the following forms of securitization is usually "double securitization"?

• A)Mortgage-backed bonds
• B)CMO
• C)Pass-through
• D)Loan sale

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Definitions:

Incremental Borrowing Rate

The incremental borrowing rate is the interest rate a lessee would have to pay to borrow funds on a secured basis over a similar term, in a similar currency, to purchase or lease a similar asset.

Capital Lease

A lease agreement that is classified as a purchase by the lessee for accounting purposes, effectively treating the leased asset as owned property.

Executory Costs

Costs related to the unperformed obligations under a lease, typically including insurance, maintenance, and taxes.

Minimum Lease Payments

The lowest amount that a lessee is obligated to pay over the lease term for the right to use an asset.