Life Cycle and Securitization a. Going public may result in management becoming

Question

Life Cycle and Securitization

a. Going public may result in management becoming short-sighted as management of public firms is sometimes pressured to try to make the quarterly numbers. b. Sale of receivables may be a way a firm can raise cash. c. Tranche I is typically the safest tranche in a securitization. d. Securitization may raise costs for the borrower, such as a homeowner, since in a securitization a bank sells the mortgage to other investors who seek to diversify their investment portfolios Life Cycle and Securitization Which of the following is FALSE?

Explanation / Answer

d. Securitization may raise costs for the borrower, such as a homeowner, since in a securitization a bank sells the mortgage to other investors who seek to diversify their investment portfolios

All other choices are true.

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