true or false on asset backed securities

CFA Level II
#1

the servicer’s quality plays a much greater role in determining an asset backed security’s rating than the firm’s management quality does for a bond.

#2

.

#3

true

#4

Management quality for a bond is same thing as economic policy for a sovereign debt. Servicer for an ABS plays no role, as it doesn’t lower credit risk/liquidity risk/prepayment risk. So i’d say false.

#5

pepp Wrote: ------------------------------------------------------- > Management quality for a bond is same thing as > economic policy for a sovereign debt. > > > Servicer for an ABS plays no role, as it doesn’t > lower credit risk/liquidity risk/prepayment risk. > > So i’d say false. The factor 2 of question #16 in CFAI 2011 mock pm was talking about the quality of the servicer? If so, the servicer’s quality seems playing some roles in the credit rating. I chose B for that question

#6

the servicer for an ABS plays a larger role than the firms management

#7

can someone pls explain this question, and what page to refer, and what chapter.

#8

pepp Wrote: ------------------------------------------------------- > can someone pls explain this question, and what > page to refer, and what chapter. The question excerpted from CFAI 2009 mock AM #48. The answer said it is a false statement, the reason as your explained.

#9

who gives a shi* about the servicer’s quality, all they are doing is collecting cash flows and pushing the cash around. Management of a corporation makes all sorts of decisions that affects the character/capacity/quality etc… of a corporate bond

#10

AndrewUNH Wrote: ------------------------------------------------------- > who gives a shi* about the servicer’s quality, all > they are doing is collecting cash flows and > pushing the cash around. Management of a > corporation makes all sorts of decisions that > affects the character/capacity/quality etc… of a > corporate bond +1