What is structured finance

Question

Accepted Answer

Structured finance refers to complex financial transactions that involve the pooling and repackaging of assets to create new financial instruments.

Structured finance involves the creation of securities backed by a pool of assets, such as mortgages, loans, or receivables.
These assets are typically divided into tranches with different levels of risk and return.
Examples of structured finance instruments include collateralized debt obligations (CDOs), mortgage-backed securities (MBS), and asset-backed securities (ABS).
Structured finance can help to transfer risk, enhance liquidity, and provide financing options for various industries.
It played a significant role in the 2008 financial crisis when complex structured products based on subprime mortgages caused widespread losses.

Top HR questions asked in Crisil Data Researcher 3