1. Servicing a pass-through security refers to a) an Fl processing of all payments. b) an FI provision of clearing services to set up the pass-through. c) broker/dealer services provided by the Fl to the ultimate holders of the pass-through. d) guarantee by the Fl of all principal and interest payments. e) an FI provision of liquidity services to the ultimate holders of the pass-through.
2. Which of the following is NOT a consequence of securitization for the financial institution (FI) that securitize the loans? a) The Fi has a decreased liquidity of assets. b) The Fl has a new source of funds. c) The Fl increases the efforts of monitoring on the securitized loans. d) It decreases the duration of assets for the FI. e) It decreases the regulation tax that are implicitly paid by the Fl.
3. Which of the following contributes to the fact that loan participations are riskier than loan assignments? a) The buyer of the loan faces the dual risk exposure and monitoring cost, le, a risk exposure to the borrower and a risk exposure to the loan-selling Fl. b) Loan participations are made in larger denominations than are loan assignments. c) loan participations are, in general, sold without recourse. d) Loan participations are, in general, sold with partial recourse. e) None of the above