- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 17. Fixed-Income Securitization
- Subject 2. The Securitization Process
CFA Practice Question
"Special purpose vehicle" refers to ______.
B. a company created to issue the asset-backed debt
C. a corporation that originally seeks funding
D. a third party that guarantees the debt
A. a debt issue backed by a special asset
B. a company created to issue the asset-backed debt
C. a corporation that originally seeks funding
D. a third party that guarantees the debt
Correct Answer: B
User Contributed Comments 5
| User | Comment |
|---|---|
| Nightsurfer | That's exactly right and exactly what B is saying. |
| steved333 | Okay, D suggests something similar, shinyman, but B is the third party entity that is set up for that purpose. |
| magicchip | D would relate to something like an LC or a wrap to back up the security. |
| johntan1979 | D is external credit enhancement. |
| Kiniry | B isn't a third party entity |