Question: Which statements are true about an ABS CDO created from the mezzanine tranche of an ABS? Check all that apply: Investors in the ABS CDO
Which statements are true about an ABS CDO created from the mezzanine tranche of an ABS?
Check all that apply:
Investors in the ABS CDO equity tranche are promised higher returns than investors who buy into the ABS CDO mezzanine tranche.
ABS CDOs are created to create more AAArates tranches.
The senior tranche of the ABS CDO is less risky than the senior tranche of the ABS.
If the underlying assets lose of their value, investors in the ABS CDO mezzanine tranche can lose at most of their investment.
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