26-54 The packaging of loans into asset pools and then selling portions of the pool to investors is known as
A)security creation.
B)securitization.
C)loan transfer.
D)loan collateralization.
E)mutual fund management.

Question

Quizplus · Accepted Answer

The process of packaging loans into asset pools and selling portions of the pool to investors is known as securitization. This is commonly done with mortgages, auto loans, and credit card debt. Securitization allows lenders to transfer the risk associated with the loans to investors, who receive a portion of the interest and principal payments made by the borrowers.

26-54 the Packaging of Loans into Asset Pools and Then