Why Is Asset Securitization Advantageous to Investors

question 58

Multiple Choice

Why is asset securitization advantageous to investors?

• A)It removes all risk of holding the assets.
• B)It results in higher returns.
• C)It increases investment choices.
• D)It eliminates the need for financing.

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Definitions:

Municipal Bonds

Municipal bonds are debt securities issued by states, cities, and other governmental entities to fund public projects, and typically offer tax-free interest payments to investors.

Tax-exempt Interest

Interest income that is not subject to federal income tax, often received from bonds issued by state and municipalities.

Bonds Issued

Debt securities released by entities such as corporations or governments to raise capital.

Local Government

The administration governing a specific local area such as a city, town, or county, responsible for providing local services and infrastructure and may have its own tax collection policies.