In a well a functioning financial market, the information conveyed in prices plays an important role in helping to optimally allocate capital to its most profitable and ultimately most efficient use. ... Summary; Asset securitization is a great innovation in that it allows financial firms to package different kinds of cash flows and risks in which they sell off to investors interested in holding them, rather than have the financial institution keep them on their balance sheet. ...

• Word Count: 2087
• Approx Pages: 8
• Grade Level: Undergraduate