Question: Evaluate if the following statement is true or false, with the correct reason. A warehousing facility does not have any credit risk. a. True, all

Evaluate if the following statement is true or false, with the correct reason. A warehousing facility does not have any credit risk.

a.

True, all the mortgages will have credit insurance.

b.

False, the mortgage issuer will bear most of the credit risk, but we are still exposed to the credit risk of the mortgage issuer.

c.

False, credit quality can deteriorate during the warehousing period.

d.

True, once the deal is structured there is no credit risk.

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