QUESTION 19 1 points Save Answer Consider a situation with subprime loans are packaged into an MBS with the MBS Mezzanine tranche repackaged into a CDO. The MBS is 70% Senior, 25% Mezzanine, 5% Equity. The CDO takes that 25% mezzanine and tranches it into 64% Senior, 32% mezzanine and 4% Equity. Assume that 30% of mortgages default. 1/3 of the defaulted loans make full recoveries in foreclosure while the others defaulting loans recover 50% in foreclosure. The % loss on the Senior tranche of the MBS is % (round to the nearest %) QUESTION 19 1 points Save Answer Consider a situation with subprime loans are packaged into an MBS with the MBS Mezzanine tranche repackaged into a CDO. The MBS is 70% Senior, 25% Mezzanine, 5% Equity. The CDO takes that 25% mezzanine and tranches it into 64% Senior, 32% mezzanine and 4% Equity. Assume that 30% of mortgages default. 1/3 of the defaulted loans make full recoveries in foreclosure while the others defaulting loans recover 50% in foreclosure. The % loss on the Senior tranche of the MBS is % (round to the nearest %)