The process of unbundling and repackaging the cash flows from one or more bonds into new securities is called
A) speculation.
B) immunization.
C) reverse hedging.
D) interest rate arbitrage.
E) financial engineering.

Question

Quizplus · Accepted Answer

The process described in the question is commonly referred to as financial engineering. Financial engineering involves the use of complex techniques, often involving mathematical models, to create and manage financial instruments and portfolios. The unbundling and repackaging of cash flows from bonds into new securities is a common example of financial engineering in practice.

The Process of Unbundling and Repackaging the Cash Flows from One