Question: Answer the below questions. a. What is the difference between credit tranching and prepayment tranching? b. Why would there be both types of tranching in

Answer the below questions.
a. What is the difference between credit tranching and prepayment tranching?
b. Why would there be both types of tranching in a nonagency deal but only one type of tranching in an agency deal?

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a Credit tranching refers to redistributing credit risk among bond classes in the structure while pr... View full answer

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