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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