17 - Leading up to the 2007-2009 Financial Crisis, the bundling of smaller loans (like mortgages) into standard debt securities. process, along with computer technology, enabled the a) easing b) liberalization C) investment banking d) securitization

17 - Leading up to the 2007-2009 Financial Crisis, the bundling of smaller loans (like mortgages) into standard debt securities. process, along with computer technology, enabled the a) easing b) liberalization C) investment banking d) securitization

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter1: Comprehensive Cases

Section1.11: New Century Financial Corporation

Problem 6Q

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Concept explainers

Swaps

A swap is a derivative contract in which two parties are agreed to exchange their cash flows from two different financial instruments for a defined period. In swap contracts, cash flows from one financial instrument are fixed and cash flow from other financial instruments is variable based on the interest rate, exchange rate, and commodity price. Swap contracts are transacted in an over-the-counter system. Swap contracts are utilized to hedge risk and mitigate loss.

Question

17- Leading up to the 2007-2009 Financial Crisis, the
bundling of smaller loans (like mortgages) into standard debt securities.
process, along with computer technology, enabled the
a)
easing
b)
liberalization
C)
investment banking
d)
securitization
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