Securitization is designed to turn illiquid loans into liquid assets in the form of securities sold in the open market.

Name: Securitization is designed to turn illiquid loans into liquid assets in the form of securities sold in the open market.
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Question

Quizplus · Accepted Answer

Securitization involves pooling illiquid loans and creating securities backed by the cash flow from those loans. These securities can then be sold in the open market, making the underlying loans more liquid.

Securitization Is Designed to Turn Illiquid Loans into Liquid Assets