- 20 Marks
Question
(a) Explain in detail the concept of securitization. (5 marks)
(b) What risk concerns should a buyer of a securitized instrument be aware of? (15 marks)
Answer
(a) Concept of Securitization (5 marks)
Pooling assets into securities via SPV, for liquidity. Emerging in Ghana for mortgages.
(b) Risk Concerns for a Buyer (15 marks)
Credit, prepayment, liquidity, structural, legal, market, operational risks. Due diligence mitigates.
- Tags: Asset-Backed Securities, Buyer Risks, Liquidity management, Securitization
- Level: Level 4
- Topic: INTRODUCTION TO ASSETS AND LIABILITY MANAGEMENT
- Series: JULY 2020
- Uploader: Samuel Duah