If a bank sells a mortgage portfolio at a price that yields the purchasers a return that is lower than the average yield on the mortgages in the portfolio, the selling price:

Multiple Choice

• is higher than the carrying value of the mortgages on the banks books.

• is equal to the carrying value of the mortgages on the banks books.

• cannot be determined by examining the carrying value of the mortgages on the banks books because the selling price is determined purely by the market.

• is lower than the carrying value of the mortgages on the banks books.