wanganjie

 

The correct answer is B

One of the motivations for participating in the securitization marketplace has been the ability to reduce credit risk, not swap one risk for another.

wanganjie

 

The correct answer is C

If an originator retains a subordinated tranche, they are subject to the first of any losses, which may not improve their financial condition. From an investor’s perspective, the best use of asset sale proceeds is the repayment of existing debt.

wanganjie

 

2、Securitization can transform ________, credit ___________ assets into _________, credit _________ assets.

A) illiquid, insensitive, liquid, sensitive.

B) liquid, insensitive, illiquid, sensitive.

C) illiquid, sensitive, liquid, insensitive.

D) liquid, sensitive, illiquid, insensitive. 

wanganjie

 

The correct answer is C

Securitization is the process of pooling illiquid credit sensitive assets and repackaging into more liquid and less sensitive securities.