The Goal of Securitization Is To

question 66

Multiple Choice

The goal of securitization is to:

• A) lock a constant rate of return for up to 10 years.
• B) ensure one financial institution holds all the risk.
• C) diversify risk by buying different classes of assets.
• D) sell paper to Fannie Mae and/or Freddie Mac.
• E) earn high returns for investors.

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Definitions:

External Users

Individuals or entities outside of a company who use its financial information, such as creditors, investors, and regulatory agencies, to make decisions.

Accounting Information

Data related to the financial performance and position of a company, including balance sheets, income statements, and cash flow statements.

Financial Analysts

Professionals who evaluate financial data, economic trends, and investment opportunities to provide guidance and advice to businesses and individuals.

Financial Accounting Standards Board

An autonomous institution tasked with the development and enhancement of financial accounting and reporting guidelines within the United States.