Question
The unbundling and repackaging of hard-to -trade financial assets into more liquid, negotiable and marketable financial instruments is called __ currency arbitrage currency hedging commercialization securitization
Answer
4.7
(255 Votes)
Sali
Elite · Tutor for 8 years
Answer
Securitization
Explanation
## Step 1:This problem involves deciphering the correct economic term that refers to the breakdown and reconfiguration of hard-to-divide or hard-to-process financial assets into more salable, transferable, and realizable financial goods. ## Step 2:Let's unveil the meanings of the available options. 'Currency arbitrage' means surpassing exchange markets that have diverse currency rates, striving to earn a profit from a balance in currency valuations. 'Currency hedging' is a protective economic measure against adverse exchange rate fluctuations; it usually involves forging contracts that pre-arrange the sale or purchase of an uncommon or unusual amount of foreign currency in the future at today's exchange rate. 'Commercialization' is the general term for introducing a new product or producing kind or line of goods into the floating market.## Step 3:Therefore, the only term remaining is 'Securitization'. By process of elimination but also through understanding, securitization is the correct term that epitomizes organizing complex or diverse collections of debts, mortgages, or other sorts of financial obligations that can then be sold to investors as bond-like securities. It does refer directly to the definition outlined in the question.