4
QuizMultiple Choice

Asset-backed Securities, Loan Sales, and Derivatives

Question 4 • (AG Q4) Financial Literacy: 25-26 (JRush)

A bank is selling its loan portfolio. This is similar to securitizing loan assets.

Answer
A
True
B
False

Explanation

A bank that sells its loan portfolio transfers loans to another party and receives cash in return. This is similar to securitization, which also involves transferring loan assets, typically by pooling them and issuing securities backed by their payments. The two processes are not identical, but the statement is true.

AI-written and checked against the verified answer.

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