medium · Asset-Backed Securities
A $500 million SBA 7(a) loan pool has a 75% guarantee from the U.S. government.
If an investor buys a 'SBA Pool Certificate' representing the guaranteed portion, what is the primary analytical risk?
- Prepayment risk
- Bankruptcy risk of the originating bank
- Liquidity risk of the secondary market
- Credit risk of the small business borrowers
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