A bank is thinking about securitizing its subprime credit card receivables. a) What are two...
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A bank is thinking about securitizing its subprime credit card receivables. a) What are two potential benefits of securitization for the bank? b) How would an investor who can only purchase AAA rated exposures be able to buy into the securitization? c) Credit card receivables produce variable short-term cash flows. Investors demand stable long-term cash flows. How does a credit card securitization achieve this?
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