The Driving Force Behind the Securitization of Mortgages and Automobile

question 65

Multiple Choice

The driving force behind the securitization of mortgages and automobile loans has been

• A) the rising regulatory constraints on substitute financial instruments.
• B) the desire of mortgage and auto lenders to exit this field of lending.
• C) the improvement in computer technology.
• D) the relaxation of regulatory restrictions on credit card operations.

---

Definitions:

Interest Rate

A lender's price to a borrower for the asset's usage, quantified as a percentage of the main sum.

Cash Flows

The movement of funds in and out of a business, determining its operating, investing, and financing activities' liquidity.

Lottery Prize

A financial reward won in a lottery, typically involving a large cash sum or valuable goods.

Monthly Payments

Regular payments made once a month, often used in the context of loans or leases.