Which of the following is true about securitization? A. It is a method of financ

Question

Which of the following is true about securitization?

A. It is a method of financing assets, in which rather than selling those assets "whole," the assets are combined into a pool, and then that pool is split into shares. Those shares are sold to investors who share the risk and reward of the performance of those assets.

B. securitization may lead to a severe principal-agent problem, where the firm that originates the credits that will ultimately be sold and securitized, retains little or no interest in the pool of securitized assets.

C. securitization process eliminates an information asymmetry problem, because all the shares sold are equally risk-free.

D. all of the above

E. Only A and B of the above

Explanation / Answer

E

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.