Which of the Below Statements Is TRUE

question 17

Multiple Choice

Which of the below statements is TRUE?

• A) Typically when amortizing assets are not securitized, the collateral is fixed over the life of the structure.
• B) To deal with situations where there may be a match between the cash flow characteristics of the asset and the liabilities, interest rate derivative instruments are used in a securitization
• C) The assets that are securitized can have a fixed rate or a floating rate.
• D) If the reference rate for the floating-rate bond classes decreases sufficiently, there could be a shortfall between the interest received from the collateral and the aggregate interest payment that must be made to the bond classes.

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