It is said that securitization "makes non-tradable assets tradable." This is because securitization ______.

A. lowers risk
B. adds liquidity
C. spreads the ownership of risk

Correct Answer: B

Securitization increases liquidity in a variety of previously illiquid financial products. For example, a group of consumer loans can be transformed into a publicly-traded debt security. A security is tradable, and is therefore more liquid than the underlying loan or receivables.