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Basic Question 1 of 3

During the lockout period, the cash flow for a credit card receivable-backed security contains ______ collected from borrowers.

I. interest
II. fees
III. scheduled principal payments
IV. principal repayments

User Contributed Comments 3

User Comment
chessdude Principal is reinvested, that's what means "lockout".
cuban Borrowers can pay back principal along with interest. Its the investors who do not receive the principal payments during the lockout period.
StJohnDale Agreed
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Edward Liu

Edward Liu

Learning Outcome Statements

describe types and characteristics of non-mortgage asset-backed securities, including the cash flows and risks of each type

CFA® 2025 Level I Curriculum, Volume 4, Module 18.