What is the difference between a one-step securitization and a two-step securitization?
What will be an ideal response?
In a one-step securitization, the originator of the loans sells the receivables to the SPV who is referred to as the "issuer" or "trust" of the asset-backed securities (ABS). In a two-step securitization, the securitization involves two SPVs. This is done to ensure that the transaction is considered a true sale for tax purposes. One SPV is called an intermediate SPV, which is
a wholly owned subsidiary of the originator and has restrictions on its activities.It is the intermediate SPV that purchases the assets from the originator. The intermediate SPV then sells the assets to the SPV that issues the ABS (i.e., the issuing entity).
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On January 1, 2007, the ledger of Global Corporation correctly showed supplies inventory of $1,000. During 2007, supplies purchases amounted to $5,000. A count (inventory) of supplies on hand at December 31, 2007, showed $1,200. The 2007 income statement should report supplies expense amounting to
A. $6,000. B. $5,200. C. $4,800. D. $4,600.
Triad Systems is a maker of computer peripherals. The firm's compact disc (CD) drive brand
was once the highly sought after for its durability and low costs. However, with the introduction of flash drives and other faster memory storage technologies, the CD drive market has declined and almost all of Triad's competitors in the market have discontinued production of CD drives. Triad Systems is possibly the lone seller of CD drives today. However, considering the fact that most of the support software for technological products such as mobile phones and operating systems are distributed in CD form, there are still users who buy CD drives. Which of the following strategies would prove most advantageous to Triad Systems? A) Triad should discontinue distribution through low value-added channels such as mail order and telephone sales. B) Triad should adopt an intensive distribution strategy involving multiple channels to boost sales of the declining product. C) Triad should raise prices of the CD drives as there is no acceptable substitute to its product in the market. D) Triad should develop product variants, such as CD drives with USB slots, to extend the life cycle of the product.