Which of the following statements is false? A. Asset-backed securities (ABS) may be backed by financial assets other than mortgages. B. Residential mortgage-backed securities (RMBS) are backed by mortgages on income producing real estate properties. C. The securitization of financial assets increases the liquidity of the underlying financial assets. D. In a sequential-pay collateralized mortgage obligations (CMOs), all scheduled principal payments and prepayments are paid to each tranche in sequence until that tranche is paid off.

A financial asset-backed securities (ABS) is a form of financial investment that is backed by a pool…

Answered: Which of the following statements is…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter13: Auditing Debt, Equity, And Long-term Liabilities Requiring Management Estimates

Section: Chapter Questions

Problem 7CYBK

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Which of the following statements is false?

Asset-backed securities (ABS) may be backed by financial assets other than mortgages.

Residential mortgage-backed securities (RMBS) are backed by mortgages on income producing real estate properties.

The securitization of financial assets increases the liquidity of the underlying financial assets.

In a sequential-pay collateralized mortgage obligations (CMOs), all scheduled principal payments and prepayments are paid to each tranche in sequence until that tranche is paid off.

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