In a securitization, the collateral is initially sold by the:
A) issuer.
B) depositor.
C) underwriter.

Question

Quizplus · Accepted Answer

In a securitization, the collateral (such as loans or mortgages) is sold by the depositor (usually a financial institution) to a special purpose vehicle (SPV). The SPV then issues securities backed by the collateral, which are sold to investors. The issuer (who could be the same as the depositor) is responsible for issuing the securities and managing the SPV, while the underwriter helps to sell the securities to investors.

In a Securitization, the Collateral Is Initially Sold by The