Fixed Income - Fixed Income Section 1
51. The yield to maturity is least likely to be known as:
- Option : A
- Explanation : The yield to maturity is known as implied market discount rate, and not implied coupon rate. It can also be called yield to redemption or the internal rate of return.
- Option : B
- Explanation : Securitization allows banks to remove assets from their balance sheet, therefore increasing the pool of available capital that can be loaned out.
54. Securitization is beneficial for investors because it:
- Option : A
- Explanation : Securitization is beneficial for investors because it provides direct access to mortgages and portfolios of receivables that would be otherwise unattainable.
55. Which of the following is least likely a benefit of securitization for banks?
- Option : B
- Explanation : The benefits of securitization include transfer of credit risk, increased funding availability without increasing reserve requirements, and automatically decreased market capital requirements.
*/?>
*/?>
*/?>
*/?>