CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

"Special purpose vehicle" refers to ______.

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
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