Securitization is the process by which financial institutions
A) pool together a group of loans and then issue securities backed by the pool.
B) determine the composition of their assets that will yield the optimal amount of security for their financial health.
C) borrow funds from the Federal Reserve and then use those funds to make loans to their customers.
D) determine sub-prime mortgage rates.
A
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Why might a rise in the price of electric razors result in an increase in demand for nonelectric razors?
(A) Because nonelectric razors are more plentiful than electric razors. (B) Because people might decide to shift to nonelectric razors to save money. (C) Because electric razors are normal goods but nonelectric razors are inferior goods. (D) Because nonelectric razors work better than electric razors.
A constant-cost industry is an industry in which
A) average costs fall as the industry expands output. B) input prices rise at a constant rate as firms in the industry use more inputs. C) average costs rise as the industry expands output. D) average costs remain constant as the industry expands output.