1. Which of the following statements about SPV and SIV is NOT correct? a) SIV's lifespan is not tied to any particular security, while SPV's life is limited to the maturity of the ABS b) Unlike SPV. SIV does not simply pass through the payments on the loans in its portfolio to the ABCP Investors, c) SPV pays out only what it receives from the underlying loans in the pool of assets backing the ABS. d) SIV is responsible for payments on its ABCP obligations whether or not the underlying pool of assets generates sufficient cash flow to cover these costs. e) None of the above
2. Which of the following statements is correct? a) The availability of a liquid secondary market for asset-backed securities discouraged Fis to follow an originate-to-distribute strategy of loan origination b) Securitization of assets increases the Fl's capital requirements c) When a Special Purpose Vehicle (SPV) creates asset-backed securities, the SPV retains ownership of the original assets. d) Investors in a Structured Investment vehicle (SIV) have direct right to the cash flows on the underlying portfolio of the Siv. e) None of the above.
3. Which of the following does NOT contribute to the fact (before the financial crisis) that SIV is a more lucrative model than SPV in generat? a) Unlike SPV, SIV investors have no direct rights to the cash flows on the underlying loans in the portfolio b) SIV's ABCP obligations carry interest obligations that are independent of the cash flows from the underlying loan/asset portfolio, while SPV pays out what it receives from the underlying loans in the pool of assets backing the ABS. c) Whereas a SPV earns only the fee for the creation of the asset-backed securities, the SI earns an expected spread between highyielding assets and low: cost commercial paper. d) SIV invests in assets that are designed to generate higher returns than the SIV's cost of fund. e) If the assets in the underlying pool does not generate sufficient cash flows, the SIV is still obligated to make interest and principle payments on its debt instruments