. Securitization of loan portfolios, such as credit card loans and mortgage loans, will occur if a. the financial market will pay more for the loan portfolio than the issued asset-backed securities. b. the financial market will pay more for the issued asset-backed securities than the loan portfolio. c. a financial guarantee is obtained from a commercial bank. d. the borrowers permit their loan to be securitized. e. both a and d

the financial market will pay more for the issued asset-backed securities than the loan portfolio.

Explanation:

Securitization

This is simply known as putting together of loan with others loans that of the same grade or similar characteristics thereby bringing about (creating) credit powered claims against the cash flows of the said portfolio, and thereafter selling the said claims to investors.

It is often regarded as the means by which some specific assets are pooled for repackaging into interest bearing securities. It is said to have started in the in 1970's, where home mortgages were to be pooled by government.

Benefits of Securitization

1. It is easier to raise cash than regular debt instruments

2. There is the transfer of credit risk of assets the firm is originating

3. To makes bundles look very good when they are ranked.

you have to put the parentheses like this:

in fact, you have to perform the operation inside parentheses first, and then proceed in order: