26-55 Which of the following is a primitive form of asset securitization?
A)Loan sales.
B)Pass-through security.
C)Collateralized mortgage obligation.
D)Mortgage-backed bond.
E)Timing insurance.

Question

Quizplus · Accepted Answer

Loan sales involve selling individual loans to investors, effectively transferring the ownership and repayment obligations of the loans to the investors. This is a primitive form of asset securitization, as it involves the sale of individual assets (loans) rather than the pooling and securitization of multiple assets into a security. Pass-through securities, collateralized mortgage obligations, and mortgage-backed bonds all involve the pooling and securitization of multiple assets. Timing insurance is not a form of asset securitization.

26-55 Which of the Following Is a Primitive Form of Asset