can you explain and solve this question ?

Points) Suppose that as a bank you have invested the following ABS CDO: Subprime Mortgages Senior Tranche (85%) AAA Mezzanine Tranche (10%) Equity Tranche (5%) Not Rated Senior Tranche (85%) AAA a. (15 points) By filling the table below, show how the losses are absorbed by the tranches in case there is a (a) 5% (b) 10% and (c) 20 % (d) 25%losses to subprime portfolios? b. (10 points) Compare the risks in the AAA-rated tranche of the ABS and the AAA-rated tranche of the ABS CDO above. Which one is riskier? Why? Based on this comparison would you explain the basic characteristics of mortgage crisis 2007. Mezzanine Tranche (10%) Equity Tranche (5%) Losses subprime portfolios to Losses to mezzanine tranche of ABS 5% 10% 20% Losses to equity Losses to Losses to tranche of ABS mezzanine senior tranche of CDO tranche of ABS ABS CDO CDO 25% CHOOSE ONLY ONE OF THE FOLLOWING MA. (25 points) Explain briefly why stress testi important factors in generating scen what should be done to m 4B. (25 Points) Suppose that as a bank you have invested the following ABS CDO: Subprime Mortgages Senior Tranche (85%) AAA Mezzanine Tranche (10%) Equity Tranche (5%) Not Rated Senior Tranche (85%) AAA a. (15 points) By filling the table below, show how the losses are absorbed by the tranches in case there is a (a) 5% (b) 10% and (c) 20 % (d) 25%losses to subprime portfolios? b. (10 points) Compare the risks in the AAA-rated tranche of the ABS and the AAA-rated tranche of the ABS CDO above. Which one is riskier? Why? Based on this comparison would you explain the basic characteristics of mortgage crisis 2007. Mezzanine Tranche (10%) Equity Tranche (5%) Losses subprime portfolios to Losses to mezzanine tranche of ABS 5% 10% 20% Losses to equity Losses to Losses to tranche of ABS mezzanine senior tranche of CDO tranche of ABS ABS CDO CDO 25% CHOOSE ONLY ONE OF THE FOLLOWING MA. (25 points) Explain briefly why stress testi important factors in generating scen what should be done to m 4B. (25