Which of the following is a primitive form of asset securitization?
A)Loan sales.
B)Pass-through security.
C)Collateralized mortgage obligation.
D)Mortgage-backed bond.
E)Timing insurance.

Question

Quizplus · Accepted Answer

Loan sales involve selling loans to other financial institutions without retaining any interest or risk in those loans. This is a primitive form of asset securitization as it involves transferring ownership of the loan to another party. Pass-through securities, collateralized mortgage obligations, and mortgage-backed bonds are more complex forms of asset securitization. Timing insurance is not related to asset securitization at all.

Which of the Following Is a Primitive Form of Asset