In the Early 2000s, an SPV Would Issue Bonds in Bundles

question 6

Multiple Choice

In the early 2000s, an SPV would issue bonds in bundles to reflect different levels of risk. The process of splitting up the bundles of debt into these different levels of risk is called ________.

• A) insuring.
• B) priming.
• C) protecting.
• D) tranching.

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Definitions:

Decentralized Operations

A management approach where decision-making processes are distributed among various levels within the organization, rather than being concentrated at the top.

Strategic Planning

Developing long-term actions to achieve a company’s objectives.

Decentralization

The distribution of decision-making powers away from a central authority to lower or local levels of an organization, government, or entity.

Operative Costs

Expenses associated with the day-to-day operations of a business, including salaries, rent, and utilities.