What Is an Asset-Backed Security?
An asset-backed security is a security with a value which is secured by a pool of assets. These assets can include outstanding car loans, credit card debt, or student loans. Mortgage-backed securities could be considered a form of asset-backed security, but they are usually discussed separately. Like other securities, asset-backed securities can be bought, sold, and traded on the financial markets by people who utilize the movement of securities to generate an income.
