The Sale of Asset-Backed Securities Can Sometimes Enable the Issuing

question 11

True/False

The sale of asset-backed securities can sometimes enable the issuing firm to acquire lower-cost funds than it normally would receive from a bank loan or bond offering.

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Definitions:

Debt Financing

The method of raising capital through the sale of bonds, bills, or notes to individuals or institutional investors which must be repaid at a future date.

Choosing a Lender

The process of evaluating and selecting a financial institution or other entity that offers loans, considering factors like interest rates, terms, and conditions.

Investor

An individual or organization that commits capital with the expectation of receiving financial returns.

Guaranteed Loan

A loan backed by a third party, reducing the risk for lenders and often making it easier for borrowers to secure financing.