When receivables are bundled together and transferred to another organization that issues securities collateralized by the transferred receivables,the arrangement is

Question

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The term that describes the process of bundling receivables and transferring them to another organization that issues securities collateralized by the transferred receivables is called securitization. Option A, Collateralization, refers to the process of pledging an asset as security for a loan. Option B, Discounting, refers to the process of selling receivables at a discounted rate to a third party for immediate cash flow. Option C, Factoring, refers to the process of selling accounts receivable to a third party at a discount. Therefore, the best choice is D, securitization.

When Receivables Are Bundled Together and Transferred to Another Organization