ASSET BACKED SECURITY Definition

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ASSET BACKED SECURITY is a debt instrument collateralized by credit card receivables, auto loans or other assets and securitized by a bank or financial institution. To reduce the possibility of a disruption in principal and interest payments, the cash flow from these assets is enhanced by a variety of methods including letter of credit support, insurance, overcollateralization and excess interest.

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ZERO-RATED denotes goods on which the buyer pays no value-added tax although the seller can claim back any tax he/she has paid.

ACTIVITY RATIO is any accounting ratio that measures a firms ability to convert different accounts within their balance sheets into cash or sales.

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