In this process, the risks that have been underwritten are pooled together into a bundle, which is then considered an asset and the underwriter then sells its shares; hence, the risk is transferred from the insurers to the capital markets.Identify this process.
A)Reinsurance
B)Securitization
C)Credit swapping
D)Redlining
E)Gentrification

Question

Quizplus · Accepted Answer

Securitization is the process where financial assets, in this case, underwritten risks, are pooled together, turned into a marketable financial instrument, and sold to investors. This allows the transfer of risk from the original insurer to the capital markets.

In This Process, the Risks That Have Been Underwritten Are