Securitization, the Process of Forming New Securities by Bundling or Slicing

question 157

Multiple Choice

Securitization, the process of forming new securities by bundling or slicing up groups of securities like mortgages and bonds, is

• A)a way of reducing risk through diversification.
• B)well understood by financial analysts and managers who engaged in it.
• C)considered shady by legitimate financial institutions.
• D)still only a minor portion of the modern financial system.

---

Definitions:

Rehearsed Information

Rehearsed information refers to data or facts that an individual has practiced recalling or reviewing, therefore enhancing the likelihood of retention and recall.

Short-Term Memory

A capacity for holding a small amount of information in mind in an active, readily available state for a short period.

Auditory

Pertaining to the sense of hearing or the system responsible for processing sound.

Chunks

Units of information organized in the short-term memory, facilitating easier recall by grouping related data together.