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ololo11 [35]
3 years ago
8

An investor, such as a bank, may prefer to invest in securities backed by a pool of mortgages purchased in the secondary market

rather than in an equal dollar amount of mortgage loans because:_________
a. mortgage backed securities eliminate prepayment risk for the investor.
b. mortgage backed securities diversify credit risk for the investor.
c. mortgage backed securities offer higher yields than individual mortgages.
d. mortgage backed securities returns are tax-exempt.
Business
1 answer:
kati45 [8]3 years ago
8 0

Answer:

b. mortgage backed securities diversify credit risk for the investor.

Explanation:

An investor, such as a bank, may prefer to invest in securities backed by a pool of mortgages purchased in the secondary market rather than in an equal dollar amount of mortgage loans because <u>mortgage backed securities diversify credit risk for the investor.</u>

In Mortgage Backed Securities, credit risk is diversified as there are many borrowers and investors between whom credit risk diversifies. So that makes investor such as bank prefer the option.

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Cutter Enterprises purchased equipment for $72,000 on January 1, 2010. The equipment is expected to have a five-year life, with
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Answer:

Annual depreciation= $13,200

Explanation:

Giving the following information:

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3 0
4 years ago
Which of the following variances cannot occur together during the same accounting period? Multiple Choice Unfavorable labor rate
jeka94

Answer: None of the other answers are correct, because all of these variance combinations are possible.

Explanation:

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