All of the following statements accurately describe Special Purpose Entities (SPEs)except for:
A)SPEs are corporations,trusts or partnerships created for a single specified purpose.
B)SPEs usually have no substantive operations and are often used for financing operations.
C)Among other things,SPEs are used for asset securitization,risk sharing and taking advantage of tax statues.
D)A variable interest entity (VIE)is a type of SPE with a limited number of equity investors.

Question

Quizplus · Accepted Answer

All of the statements A, B, and C accurately describe SPEs. However, statement D is incorrect. A VIE is a type of SPE that does not have a controlling financial interest, meaning that the investors have limited decision-making power and exposure to the entity's ongoing risks and rewards. The number of equity investors in a VIE can be either limited or unlimited.

All of the Following Statements Accurately Describe Special Purpose Entities