CAF-7 · Chapter 8 · Question 10 of 15
The process of converting existing illiquid assets or future cash flows (such as mortgage repayments) into marketable securities that can be sold to investors for immediate cash is known as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Securitization
Explanation
Securitization is the financial process of pooling illiquid assets (like mortgages or receivables) and repackaging them into interest-bearing securities to sell to investors, raising immediate cash for the originating company.
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