GARP 2016-FRR Exam - Topic 2 Question 9 Discussion

Actual exam question for GARP's 2016-FRR exam

Question #: 9
Topic #: 2

[All 2016-FRR Questions]

Securitization is a process by which banks:

AIncrease the exogenous liquidity of the assets

BDecrease their endogenous liquidity of the assets

CSell illiquid assets

DSell liquid assets

Show Suggested Answer

Suggested Answer: C

by Leontine at Jul 14, 2025, 06:22 AM

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Jacquelyne

7 months ago

I thought they were just increasing liquidity, not selling anything.

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Emmanuel

7 months ago

Wait, can banks really just sell off their assets like that?

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Haydee

7 months ago

Totally agree, it's all about turning those assets into cash!

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Torie

7 months ago

Securitization helps banks sell illiquid assets.

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Beckie

7 months ago

Definitely a way to manage risk and improve liquidity!

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Nicolette

8 months ago

From what I practiced, I believe securitization is primarily about converting illiquid assets into securities, which makes me think option C is correct.

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Twanna

8 months ago

I feel a bit confused about the terms "endogenous" and "exogenous" liquidity. I hope I can recall the right definitions during the exam.

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Angella

8 months ago

I think I came across a practice question that mentioned selling illiquid assets as part of the securitization process. So, I might lean towards option C.

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Felix

8 months ago

I remember studying that securitization helps banks manage their asset liquidity, but I'm not sure if it increases or decreases it.

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Lavina

9 months ago

I'm leaning towards D - sell liquid assets. Securitization allows banks to free up capital by selling off their liquid assets, right?

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Lauran

9 months ago

I'm pretty confident the answer is B - securitization decreases the endogenous liquidity of the assets. That's the whole point of the process.

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Malcom

9 months ago

Okay, let me break this down. Securitization is when banks package illiquid assets and sell them, so the answer must be C - sell illiquid assets.

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Izetta

9 months ago

Hmm, I'm a bit confused on this one. I'm not sure if the answer is A or B. I'll need to think it through carefully.

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Dorothy

9 months ago

This question seems straightforward, I think the answer is A - securitization increases the exogenous liquidity of the assets.

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Joseph

11 months ago

That's a good point, both answers could be valid depending on the context.

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Lai

11 months ago

But wouldn't selling illiquid assets help increase liquidity as well?

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Lettie

11 months ago

I believe the answer is A) Increase the exogenous liquidity of the assets.

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Eleonora

11 months ago

I was born ready for this question. C is the way to go!

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Gilma

10 months ago

User 3: Yes, that's correct. It helps banks manage their liquidity.

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Vonda

10 months ago

User 2: I agree, selling illiquid assets is part of the securitization process.

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Clarence

11 months ago

User 1: I think C is the correct answer.

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Joseph

12 months ago

I agree with Lai, selling illiquid assets makes sense in securitization.

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Lai

12 months ago

I think the answer is C) Sell illiquid assets.

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Madelyn

12 months ago

A, definitely A. Gotta increase that liquidity, baby!

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Wilda

11 months ago

A, definitely A. Gotta increase that liquidity, baby!

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Karrie

11 months ago

A) Increase the exogenous liquidity of the assets

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Whitley

1 year ago

Securitization? More like 'secure-a-vacation' if you ask me!

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Daron

11 months ago

Haha, 'secure-a-vacation'! That's a good one.

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Kenneth

12 months ago

C) Sell illiquid assets

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Cletus

12 months ago

A) Increase the exogenous liquidity of the assets

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