The process in which the principal amount of a security is repaid gradually over time is referred to as
A)securitization.
B)depreciation.
C)amortization.
D)discounting.

Question

Quizplus · Accepted Answer

Amortization refers to the process of repaying the principal amount of a security gradually over time, typically through a series of fixed payments. This is commonly seen in the context of loans, where the borrower makes regular payments that consist of both principal and interest. Securities such as bonds may also be structured with an amortization schedule, in which a portion of the principal is repaid with each interest payment. Securitization refers to the process of pooling together similar assets and issuing securities that are backed by these assets. Depreciation and discounting are not relevant to the concept of repaying the principal amount of a security over time.

The Process in Which the Principal Amount of a Security