CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

A special purpose vehicle plays a critical role in ______
A. that it allows the use of a short-term unsecured promissory note that is issued on the open market.
B. that it allows borrowers to create investment vehicles to satisfy their investment objectives (but forbids them from using swaps for hedging).
C. the ability to create an asset-backed security (separating the assets used as collateral from the corporation seeking financing).
Explanation: A corporation can use such a vehicle to finance a large project without putting the entire firm at risk.

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