Here is the synopsis of our sample research paper on Securitization and Critique of CAPM. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 4 page paper is written in two parts. The first part at what is meant by securitization, how it is defined, giving a brief history of these financial tool, before considering the role it played in the 2008 credit crunch. The second part of the paper discusses some of the criticisms for the Capital Asset Pricing Model (CAPM) including Roll’s 1977 criticism. The bibliography cites 1 source.
Page Count:
4 pages (~225 words per page)
File: TS14_TEsecuit.doc
Buy This Term Paper »
Unformatted sample text from the term paper:
pooled investment with the underlying assets repacked into the format of an interest bearing security. Credit for the development of securitization can be given to Samuel W Strauss, who
developed and sold a mortgage backed security around 1909, and then between 1910 and 1929 they became quiet popular, but they fell out of favour with the great depression. Their
modern history starts in the 1970s with the securitization of the government sponsored body; the National Mortgage Association and the Ginnie Mae pass-through. Today securitization is a tool used by
many financial institutions. To understand why they were revived, and have become very popular, it is necessary to look at the way that they work. A basic concept
can be explained by looking at the process of creating and selling this type of security. In the first stage of the process there is a financial institution, usually a
lender, but has income producing assets, usually loans. The organization will identify the assets that it wants to remove from its balance sheet, and then forward them together in what
will be referred to as a reference portfolio. The pooled asset will then be sold to the issuer, for example this may be a special purpose vehicle (SPV) which is
an entity that is often set up by the financial institutions sales, the specific aim of purchasing and then realizing the value of off balance sheet transactions. In the second
stage issuer, usually the SPV, will finance the acquisition of the investment with the issuance of tradable securities, each representing a share of the fund. The investors purchases for the
capital markets, and receive an income based on the underlying assets, for example there may be a fixed rate of interest, or a floating rate of interest. This has the
...