Which of the following statements is true regarding asset-backed securities (ASB)?
A)They offer relatively high yields
B)They have relatively long maturities
C)They generally have low credit ratings
D)Each traunche has the same risk

Question

Quizplus · Accepted Answer

Asset-backed securities (ABS) offer relatively high yields compared to other fixed-income securities due to their complex structure and the credit quality of underlying assets. However, they may not necessarily have long maturities or low credit ratings. Additionally, each tranche may have different levels of risk depending on the priority of repayment in case of default.

Which of the Following Statements Is True Regarding Asset-Backed Securities