What Is An Asset Backed Security (ABS)?

An asset backed security (ABS) is a security which uses an asset as the form of backing (i.e. collateral). The asset is usually something that provides consistent payments that line up with the interest payments from the security. The most well known form of ABS's are mortgage-backed securities.

To learn more about this concept and become a master at bonds and fixed income, you should check out our Bond Course - Fixed Income (coming soon!).

 

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