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Basic Question 7 of 11

Which credit enhancement technique involves structuring the ABS transaction so that the value of the underlying assets exceeds the value of the issued securities?

A. Overcollateralization
B. Credit tranching
C. Excess spread

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I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu

Edward Liu

Learning Outcome Statements

describe typical credit enhancement structures used in securitizations

CFA® 2024 Level I Curriculum, Volume 4, Module 18.