Question

A security is a financial instrument backed by assets. They give the holder an interest or right in something else. Regulation under state or federal securities laws may apply to which of the following?a. speculative purchase of raw land by a doctor as part of a retirement planb. condominium project that includes both residential and retail uses within one structurec. resort condominium project in which owners enter their units in a common rental pool to enhance their income

Answer 1

The correct answer is C. Resort condominium project in which owners enter their units in a common rental pool to enhance their income.

Step-by-step explanation:

Asset-backed securities, ABS: They are a type of bonds or promissory notes backed by financial assets such as loans, leases, personal debt, credit card debt, the right to accounts receivable or even royalties, with the exception of residential mortgages or commercial.

When a financial institution sells ABSs, it had already bought loans from a lender (such as banks) and uses these loans as collateral for bonds. The financial institution collects the loan payments and uses this income to return the bond with interest to the investor. Lenders sell their loans in this way to improve their financial health and make more loans.