In an asset-backed security transaction:
A) There is no active management.
B) There is no business risk.
C) The servicer simply collects the cash flow.
D) All of the above.
E) None of the above.

Question

Quizplus · Accepted Answer

In an asset-backed security (ABS) transaction, there is typically no active management as the pool of assets is predetermined, there is no business risk directly associated with the performance of a business since the return is based on the performance of the underlying assets, and the servicer's role is primarily to collect the cash flows from those assets and distribute them to the investors.

In an Asset-Backed Security Transaction