Asset securitisation is where:
A)existing securities are sold to create a pool of funds for investment in income assets
B)securities are created based on house loans and income payments from the house owners are then paid to the investors
C)securities are created based on a pool of underlying assets and the value and income payments of the securities are derived from the underlying assets
D)All of the listed options are correct.

Question

Quizplus · Accepted Answer

Asset securitisation involves creating securities based on a pool of underlying assets, such as mortgages or loans. The value and income payments of these securities are then derived from the underlying assets. Option A is incorrect because it refers to the sale of existing securities, not the creation of new securities. Option B is incorrect because it only refers to house loans, whereas asset securitisation can involve a variety of underlying assets. Option D is incorrect because option A is not a correct description of asset securitisation.

Asset Securitisation Is Where