business The agency problem in the mortgage markets was due to the model. O 1) "pass-through" 2) business-as-usual 3) securitization 4) originate-to-own OS) None of the answers are correct

QUESTION 1 Which if the following is not true of the 5Cs in evaluating credit quality     Character refers to the integrity and honesty of the borrower and applies to both individuals and companies     Capital refers to the savings or wealth of the borrower as an additional source of income to repay the loan     Collateral refers to assets that are pledged to lender     Capacity refer to external factors including the state of economy  that can impact the borrower’s source of income.     QUESTION 2 Which of the following is not true?                                   Firm A                                      Firm B                          Industry Benchmark   2018 2019 2020 2018 2019 2020 2018 2019 2020 ROA 9.14% 9.50% 9.90% 8.11% 8.16% 8.19% 8.11% 8.14% 8.15% ROE 22.45% 22.95% 23.45% 19.65% 19.88% 20.12% 19.95% 20.55% 21.00% TIE 1.75 1.65 1.55 2.75 2.90 3.05 2.25 2.30 2.50 CR 3.25 3.66 3.75 2.55 2.65 2.75 2.40 1.45 2.50 EPS…

Which of the following statements is false?   A.   Asset-backed securities (ABS) may be backed by financial assets other than mortgages.   B.   Residential mortgage-backed securities (RMBS) are backed by mortgages on income producing real estate properties.   C.   The securitization of financial assets increases the liquidity of the underlying financial assets.   D.   In a sequential-pay collateralized mortgage obligations (CMOs), all scheduled principal payments and prepayments are paid to each tranche in sequence until that tranche is paid off.

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