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Basic Question 0 of 9
Select the correct statement(s) regarding a CDO.
II. The majority of the underlying collateral typically pays a fixed rate.
III. The equity tranche receives a floating-rate payment.
IV. The junior tranche receives a floating-rate payment.
I. To offer sufficient protection, over 50% of the deal is structured as either equity or junior tranches; the senior tranche is less than 50%.
II. The majority of the underlying collateral typically pays a fixed rate.
III. The equity tranche receives a floating-rate payment.
IV. The junior tranche receives a floating-rate payment.
User Contributed Comments 1
| User | Comment |
|---|---|
| quanttrader | only senior tranche recvs floating |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe collateralized debt obligations, including their cash flows and risks
CFA® 2025 Level I Curriculum, Volume 4, Module 18.