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Basic Question 9 of 10
"Special purpose vehicle" refers to ______.
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
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
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 |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
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Learning Outcome Statements
describe securitization, including the parties and the roles they play
CFA® 2024 Level I Curriculum, Volume 4, Module 17.