20
QuizMultiple Choice

Asset-backed Securities, Loan Sales, and Derivatives — Test

Question 20 • (AG Q4) Financial Literacy: 25-26 (JRush)

Even though a bank has sold a loan portfolio it will continue to receive a fee or percentage of the loans’ interest payments.

Answer
A
True
B
False

Explanation

A bank can sell a loan portfolio but still service the loans, collecting payments from borrowers and forwarding them to the new owner. For that servicing work, the bank may receive a fee, sometimes calculated as a percentage of the interest payments. Therefore, the statement is true.

AI-written and checked against the verified answer.

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