A ________ is a financial intermediation device that allowed the participant to borrow short and lend long.

Question

Quizplus · Accepted Answer

The term described in the question refers to a structured investment vehicle, which is a type of financial intermediary that borrows money at short-term rates and uses the funds to purchase longer-term assets such as loans or mortgage-backed securities. This strategy allows the intermediary to profit from the difference between the interest rates earned on the assets and the borrowed funds, known as the "carry trade." Sub-prime loans and non-conforming loans are types of loans, but they do not directly relate to the borrowing and lending structure of a structured investment vehicle.

A ________ Is a Financial Intermediation Device That Allowed the Participant