Question

Which of the following describes the process in which certain types of assets are pooled so that they can be repackaged into interest-bearing securities?

A Repackaging Correct Answer Incorrect Answer
B Stripping Correct Answer Incorrect Answer
C Securitization Correct Answer Incorrect Answer
D Reconstruction Correct Answer Incorrect Answer
E Reconstitution Correct Answer Incorrect Answer

Solution

The process in which certain types of assets are pooled so that they can be    repackaged into interest-bearing securities is called Securitization. The interest and principal payments from the assets (like loans) are passed through to the investors of the securities.

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