CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Jasper Corporation sold its receivables to a special purpose vehicle, JTL Corporation, created by Jasper for that purpose. If JTL sells securities backed by the receivables, the credit rating associated with those securities will most likely be based on the ______.
A. creditworthiness of JTL
B. creditworthiness of Jasper
C. collateral and credit enhancement mechanisms used
Explanation: The rating of asset-backed securities is typically independent of the issuer or originating firm's credit; the rating depends on the collateral offered and the strength of any external or internal credit enhancements.

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