- 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
External credit enhancements for asset-backed securities include (a) ______
II. letter of credit from a bank
III. over-collateralization
I. seller guarantee
II. letter of credit from a bank
III. over-collateralization
A. I and II
B. II and III
C. I, II and III
Explanation: Over-collateralization is a form of internal credit enhancement.
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