- CFA Exams
- CFA Level I Exam
- Study Session 14. Fixed Income (1)
- Reading 45. Introduction to Asset-Backed Securities
- Subject 5. Collateralized Mortgage Obligations
CFA Practice Question
If an insurance company wants to offer bond insurance for an asset-backed security transaction where an AA credit rating is sought, the insurance company must have at least a ______ credit rating.
A. A
B. AA
C. AAA
Explanation: Typically a structure cannot receive a rating higher than the rating on any third-party providing an external guarantee.
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