In the Process of 'Securitisation

question 7

Multiple Choice

In the process of 'securitisation':

• A) a parcel of small- denomination assets is sold by issuing a large- denomination certificate backed by those assets.
• B) the cash shortfall caused by Commonwealth budget deficit is funded by the issue of debt securities.
• C) a borrower fully repays a debt security.
• D) a company that has never issued shares before becomes listed on the stock exchange.

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Definitions:

Government Intervention

The involvement of government in the market with the aim of influencing economic outcomes, such as through regulations, subsidies, or taxes.

Global Pricing

The strategy of setting prices for products or services on a worldwide scale, considering factors like costs, market conditions, and competition.

Intervention Effects

The impact of external actions, often by governments or institutions, intended to alter an outcome or correct a market failure.

Rigid Cost-plus Pricing

A pricing strategy where a fixed percentage is added to the total cost of production to determine the price of a product, without flexibility.