Question

Check all potential advantages of securitization.

(A) Securitization provides a way to sell illiquid assets
(B) Securitization makes lenders take responsibility for the long-term stability of the loan
(C) Securitization helps diversity risk instead of holding on to a particular mortgage
(D) Securitization is great for widening the pool of investors
(E) Securitization helps remove assets from the balance sheet to maintain capital requirements

Answer 1

Answer: Option (A),(C),(D) and (E) are the all advantage of the securitization.

Step-by-step explanation:

The securitization is the type of assets which turn into the security. It is the process of repacking the the specific type of assets as the interest bearing security. There are many types of advantages of securitization is as follows:

• The securitization providing a specific and efficient way for selling the liquid assets as it used in the house hold purpose and it is the main example of the securitization.
• The securitization basically help the diversity risk among the clients and investors who mainly but the security.
• The securitization is the process which increase the pool of the investor.
• It basically help to remove the assets and maintain and balance the sheet regulatory according to the capital requirement.