Asset backed securities are relatively safe investments

Assignment Help Financial Management

Reference no: EM131089256

Asset backed securities (ABS) are relatively safe investments because

A. because the pool of assets backing the securites is often much larger than the bond issue.

B. Becuase the debt pools are highly diversified

C. becuase the loans in the pool are collateralized with valuable assets such as cars adn trucks

D. they are collateralized only with the highest quality loans.

Reference no: EM131089256

Questions Cloud

How much value does the use of debt add : A local firm has debt worth $250,000, with a yield of 9%, and equity worth $400,000. It is growing at a 6% rate, and its tax rate is 40%. A similar firm with no debt has a cost of equity of 11%. Under the MM extension with growth, what is the value o..

Second floating rate payment : Today is Monday, April 25, 2016. You are a customer ready to trade swaps.You execute a new receive fixed/pay floating swap with a 5-year tenor and $10 million notional amount. How many days of interest will you owe on your second floating rate paymen..

Compute the value of share of common stock : Compute the value of a share of common stock of Lexi's Cookie Company whose most recent dividend was $2.50 and is expected to grow at 3 percent per year for the next 5 years, after which the dividend growth rate will increase to 6 percent per year in..

What is the portfolios expected return : A portfolio is invested 10 percent in Stock G, 50 percent in Stock J, and 40 percent in Stock K. The expected returns on these stocks are 9 percent, 15 percent, and 19 percent, respectively. What is the portfolio's expected return?

Asset backed securities are relatively safe investments : Asset backed securities (ABS) are relatively safe investments because

Property and casualty insurance : Mark Arkanfarkar (purely fictitious name) and his wife, Mary, have some concerns about their entire insurance program, which includes their personal insurance and their home based business. Using all the risk management knowledge and information avai..

The prime rate interest is : The prime rate interest is

Statements about margin requirements on option positions : Which one of the statements about margin requirements on option positions is not correct?

Reducing or offsetting political risk : Which one of these is probably the best means of reducing or offsetting political risk?

User Account

All Pages