Fixed rate versus floating rate asset backed securities, Financial Management

There are fixed as well as floating rate asset-backed securities. A floating rate asset-backed security is one whose underlying pool consists of loans or receivables carrying a floating rate. Examples of this kind are, securities backed by credit card receivables, student loans, trade receivables, home equity loans, etc. On the other hand, a fixed rate asset-backed security is structured in such a way that the underlying pool consists of fixed-rate loans but the security is divided into one or more floating rate tranches. For example, equity loans carrying fixed rate can be pooled to create a structure with floating-rate tranches.

Posted Date: 9/8/2012 9:06:33 AM | Location : United States







Related Discussions:- Fixed rate versus floating rate asset backed securities, Assignment Help, Ask Question on Fixed rate versus floating rate asset backed securities, Get Answer, Expert's Help, Fixed rate versus floating rate asset backed securities Discussions

Write discussion on Fixed rate versus floating rate asset backed securities
Your posts are moderated
Related Questions
Treasury bonds are the bonds issued with maturities greater than 10 years. However, these are commonly issued with a maturity of 30 years. Like T-notes, these bon

TR has recently been promoted to his first management position. In the past, he very much enjoyed working as part of a team, but is having some difficulty in adapting to his new ro

Q. What do you mean by Treasury Bills? Treasury bills (TBs) are short-term government securities. The usual practice in India is to sell treasury bills at a discount and redeem

Assets Pension insurance companies' assets can be divided into five main investment classes: cash, long-term bonds, stocks, property and loans. The total returns on the assets

T-Bills are issued to enable the government to tide over short-term liquidity requirements with maturities varying from a fortnight to a year. These instruments a

Repo rates vary from transaction to transaction. They depend upon a variety of factors like: Collateral's quality Repo term

How competitive is the market for banking services? A: With above 7,000 banks and thrifts in the U.S., banking is one of the so many competitive industries in the world. Refer

On-the-run treasury issues are the most recently auctioned issues of a given maturity. They include Treasury bills of 3-month, 6-month and 1-year maturity;  treas

Types of asset-backed securities 1.  Auto Loan-Backed Securities (ALBs) 2.  Credit Card Receivab

Q. What is the importance of investigation of incidents? 1. Incident investigation is the process of identifying the underlying causes of incidents and implementing steps to pr