medium · Asset-Backed Securities
Assume a transfer of 500 million of auto loans qualifies for sale accounting and derecognition. The loans' carrying amount is 500 million; the bank receives 480 million cash and recognizes a retained residual at 30 million fair value. Assume no servicing asset or liability, recourse obligation, transaction cost, or other gain-or-loss adjustment.
What gain on sale is recognized?
- 10M
- 30M
- 0M
- -20M
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