Which of the following assets is easier to securitize?
A)An asset with a large bid-ask spread.
B)An opaque asset.
C)An information-sensitive asset.
D)An information-insensitive asset.
E)A pool of mortgage loans without credit enhancement.

Question

Quizplus · Accepted Answer

An information-insensitive asset is easier to securitize because it is not affected by changes in external information or market conditions, making it more predictable and stable. Assets with large bid-ask spreads or that are opaque or information-sensitive may have uncertain and volatile cash flows, which could make them difficult to securitize. A pool of mortgage loans without credit enhancement may also be more difficult to securitize if the creditworthiness of the borrowers is uncertain.

Which of the Following Assets Is Easier to Securitize