Daisy chain schemes are intended to mask bad loans by making them appear recent and good.

• A. Not stated
• B. True
• C. Not applicable
• D. False

Answer: (B)

Daisy chain schemes use a sequence of related entities to hide the true nature of assets or liabilities, often by layering transactions to avoid scrutiny. In the lending world, this tactic can be used to repackage or re-age loans so they look new and performing, even though the underlying loans are bad or at risk. By resetting the apparent age and presenting fresh terms, the real quality of the loan is concealed, which is exactly the aim described. This matches the statement that such schemes are intended to mask bad loans by making them appear recent and good. Not stated or not applicable don’t fit because the description clearly asserts a intentional effect, and false would contradict the described purpose.