Securitisation is the process of:

Question

Quizplus · Accepted Answer

Securitisation involves pooling income-producing assets such as loans or mortgages and then issuing new securities that are backed by this pool of assets. These new securities can then be traded on the market, making the underlying assets more marketable. This helps to increase liquidity in the market and can also reduce risk by diversifying the pool of underlying assets. Hiring underwriters (B) is a separate process that is typically used in the issuance of securities. Converting tradable securities into illiquid assets (C) is the opposite of securitisation and would not increase marketability. Only lending/investing with AAA-rated companies (D) is a risk management strategy for investors, but is not related to securitisation.

Securitisation Is the Process Of