English Language Tests-Intermediate level''''s archiveAsset Backed Securities pptx

English Language Tests-Intermediate level's archive
Asset Backed Securities
1. Ope Agbaje, the ABS analyst at CSAM, goes on to
explain that there are a number of important advantages
for investors asset backed securities.

filing
holding
keeping
seeking
2. Firstly, they gain exposure to a liquid, fixed income
investment in a diversified pool of assets, such as auto
loans, which make alternative to a corporate bond
or other fixed income investment.

a lucrative
an attractive
an elective
a seductive
3. In some cases assets, or assets which investors
would not ordinarily have access to, such as loans to small
and medium enterprises, make up the pool of assets.

bound
fixed
illiquid
restricted
4. However, unlike unsecured bonds, which are fully
dependent on the operating, payment ability and ultimately
bankruptcy risk of a company, asset backed securities to
various degrees tend to be (fully or partly) from

those risks.

excluded
exclusive
remote
removed
5. Typically, they are legally separated from the originator
and rely entirely on the performance of the ring-fenced
assets, transferred and as bond collateral.

guaranteed
pledged
sworn
vowed
6. Simply put, the investor buying the securities is not
to the credit risk associated with originator of the
assets and, thus, ABS bonds represent one of the more
secure forms of fixed income securities from a credit
quality standpoint.

engaged
entailed
exposed
extended
7. A number of ABS issues also benefit from external
protection in the form of insurance, such as a credit
enhancement provider that ensures the quality of the
issue, as well as a liquidity provider that covers certain
cashflow

overruns
shortcomings
shortfalls
windfalls
8. A further benefit for the investor is that the risk
associated with consumer credits, such as credit cards
and home loans, can be more easily calculated using
advanced quantitative techniques, without the same level
of often associated with other fixed income debt
such as corporate bonds.

accuracy
objectivity
subjectivity
subtlety
9. This is because a statistical approach can be more
relevant for some asset back bonds that have a
underlying collateral consisting of thousands of loans.

disparate
homogenous
motley
unique
10. While ABS bonds have long been a key component of
many fixed income strategies, the search for new sources
of have led many investors to the ABS market.

assets
income
interest

yield