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.