Securitization refers to:

multiple choice $1$

ensuring that the lending institution is stable.

combining several loans or other financial assets into a bundle and then making sure that the bundle has sufficient collateral.

making sure that a loan has sufficient collateral.

combining several loans or other financial assets into a bundle and then selling that bundle in whole or in parts to financial investors.

During the recent housing market crisis, lenders:

multiple choice $2$

avoided securitization and this caused the crisis.

misunderstood securitization and this caused the crisis.

relied too much on securitization to diversify their financial investments.

relied too much on securitization to concentrate their financial investments.

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