Question
It was observed in class that as of August 7, 2009, 63% of AAA non-agency MBS issued from 2005-2007 had been downgraded; 53% to BB
It was observed in class that as of August 7, 2009, 63% of AAA non-agency MBS issued from 2005-2007 had been downgraded; 53% to BB or lower.
Managers of investment- grade portfolios who bought AAA non-agency MBS that were downgraded to BB or lower would have encountered which of the following immediately after a AAA to BB(or lower) downgrade?
A. they would have been required to sell and would have taken a loss on the sale
B. they would have been required to sell and would have made money on the sale
C. they would not have been required to sell and would have taken a mark-to-market gain
D. they would not have been required to sell and would have taken a mark-to-market loss
E. none is correct
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Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
