Automated clearinghouses are commonly used by consumers to make direct payments for

Multiple Choice

• insurance premiums.

• mortgage payments.

• utility bills.

• All of the options

Which of the following best describes the benefits to the borrower of selling asset-backed securities?

Multiple Choice

• Due to the portfolio effect, the borrower can package up low-quality accounts receivable and sell them for a premium price.

• The borrower trades future cash flows for current cash flows.

• The asset-backed security is likely to carry a high credit rating of AA or better.

• The borrower trades future cash flows for current cash flows and the asset-backed security is likely to carry a high credit rating of AA or better.

Analog Computers needs to borrow $815,000 from the Midland Bank. The bank requires a 17% compensating balance. How much money will Analog need to borrow in order to end up with $815,000 spendable cash? (Round your answer to the nearest dollar amount.)

Multiple Choice

• $981,928

• $1,491,450

• $1,670,904

• $953,550