As a pricing tool, securitization provides
A)the bank with a more accurate estimate of funding costs.
B)the bank with a better way to diversify its loan portfolio
C)the bank with a better way to stay competitive
D)a and b only
E)a and c only

Question

Quizplus · Accepted Answer

Securitization helps banks get a more accurate estimate of funding costs by converting loans into securities, which can be sold in financial markets. This process also allows banks to stay competitive by offering a broader range of financial products and managing risks more effectively. Diversification of the loan portfolio is not directly related to securitization's role as a pricing tool.

As a Pricing Tool, Securitization Provides