The main difference between an asset-backed bond and a pass-through is
A)an asset-backed bond is collateralized by a portfolio of loans while a pass- through is not.
B)an asset-backed bond remains on the originator's consolidated balance sheet while a pass-through does not.
C)an asset-backed bond is sold directly to investors by the originator while a pass- through is sold through a trust.
D)an asset-backed bond is unsecured while a pass-through is secured.
E)All of the above

Question

Quizplus · Accepted Answer

An asset-backed bond remains on the originator's consolidated balance sheet, while a pass-through security is typically removed from the balance sheet as it is sold through a trust to investors, effectively transferring the risk and ownership of the underlying assets to the investors.

The Main Difference Between an Asset-Backed Bond and a Pass-Through