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1) Discuss “securitization” in the context of that in which a commercial (Hint: collateralized mortgage obligation...

1) Discuss “securitization” in the context of that in which a commercial (Hint: collateralized mortgage obligation circa 2006) and an investment bank may engage. What are two reasons—of many—why securitization likely occurs with financial intermediaries?

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Ans: Securitization can be said as a process of converting those assets which are generally regarded as nonliquid assets means they can not be easily converted into cash and and considering these assets as a security after following the process financial engineering process. Commercial securitization are those where the security is backed by not through real estate assets rather than through commercial mortagages.

Securitization likely offers with financial intermediaries because it brings the lliquidity and flexibility to the financial inetrmediaries at a very calculated and crisp risk. And that is the reason it has gained so much of popularity.

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