Securitization Benefits Financial Markets By

question 41

Multiple Choice

Securitization benefits financial markets by:

• A) increasing the role of intermediaries.
• B) establishing a barrier between investors and originating borrowers.
• C) allowing investors to tailor credit risk and interest rate risk exposures to meet their individual needs.

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Definitions:

Dividends

Distributions of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Treasury Stock

Shares of a company's own stock held by the company itself, often bought back from shareholders and not considered when calculating earnings per share or dividends.

Retained Earnings

The portion of a company's profits that is not distributed to shareholders as dividends but is kept by the company for reinvestment.

Net Income

The final financial gain of a business once taxes and all expenses are subtracted from the overall income.