Packaging a portfolio of financial securities and issuing an asset-backed security backed by this portfolio is known as:
A)asset securitization.
B)revenue securitization.
C)backup securitization.
D)payment securitization.

Question

Quizplus · Accepted Answer

This process is known as asset securitization, where the portfolio of financial securities is packaged into a single security, and investors buy shares in this security. The payments from the underlying assets in the portfolio back the payment of the asset-backed security.

Packaging a Portfolio of Financial Securities and Issuing an Asset-Backed