Why would an interest rate derivative be using in a securitization structure?
Answer to relevant QuestionsThe below questions relate to auto loan-backed securities. Answer each one. (a) What is the cash flow for an auto loan-backed security? (b) Why are prepayments of minor importance for automobile loan-backed securities? (c) ...How does a CDO differ from an ABS transaction? Answer the below questions. (a) Why is credit enhancement required in a securitization? (b) What entity determines the amount of securities needed in a securitization? What is the tax advantage for a company thatqualifies as a REIT? What are the advantages of an exchange-traded fund relative to open-end and closed-end investment companies?
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