The process of transforming otherwise illiquid financial assets into marketable capital market instruments is known as
A)securitization.
B)internationalization.
C)arbitrage.
D)program trading.

Question

Quizplus · Accepted Answer

Securitization is the process of converting non-marketable financial assets, such as loans or mortgages, into tradable and marketable securities. This is achieved by pooling similar assets and issuing bonds or securities backed by the underlying assets. Securitization enables financial institutions to access a larger pool of capital and to transfer credit risk to investors.

The Process of Transforming Otherwise Illiquid Financial Assets into Marketable