What Are Some Advantages of Asset-Backed Securities to Investors

question 72

Short Answer

What are some advantages of asset-backed securities to investors?

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Definitions:

Bond Portfolio

A collection of bonds held by an individual or institution as an investment strategy to diversify risk and generate income.

Maturity

The final payment date of a loan or financial instrument, at which point the principal (and all remaining interest) is due to be paid.

Interest Rate Risk

The risk that changes in interest rates will adversely affect the value of an investment, particularly relevant for fixed-income securities.

Variable-Rate Assets

Assets that earn interest at rates which adjust over time based on prevailing market conditions.