Newly issued mortgage backed security

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Reference no: EM13772413

Assume a bank purchases a newly issued mortgage backed security (MBS) for $1,000. After the year, the value of the MBS has decreased to $750:

A. The book value of the MBS will equal $750.

B. The book value of the MBS will equal the difference between $1,000 and $750, or $250.

C. Using mark-to-market accounting, the value of the MBS will equal $750.

D. Using mark-to-market accounting, the value of the MBS will equal $1,000.

Reference no: EM13772413

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