Securitization is the process of transforming illiquid financial assets such as residential mortgages into marketable securities.

Question

Quizplus · Accepted Answer

Securitization is indeed the process of transforming illiquid financial assets into marketable securities. This is typically done through pooling such assets and issuing bonds or other securities backed by the pooled assets. This allows the original asset holders to access liquidity while giving investors the opportunity to earn returns from the cash flows generated by the underlying assets.

Securitization Is the Process of Transforming Illiquid Financial Assets Such