Question

Securitization refers to the creation of new securities by ______.
A. selling individual cash flows of a security or loan
B. repackaging individual cash flows of a security or loan into a new payment pattern
C. taking an illiquid asset and converting it into a marketable security
D. selling financial services overseas as well as in the U.S

Answer 1

Answer:

C. taking an illiquid asset and converting it into a marketable security

Explanation:

Securitization is a process where a financial company combines several of its assets into a single or consolidated financial instrument or securities. It  is the process converting debts, liquid asset into securities that are then bought and sold in the financial market. The process of securitization helps organisation to raise funds and boost liquidity.