Describe the role of tranching in the granting of easy credit that fueled the housing bubble.
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Describe the role of tranching in the granting of easy credit that fueled the housing bubble.
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Tranching is a process of dividing a pool of assets or securities into different segments or tranches each with a different level of risk and return23 In the context of mortgagebacked securities MBS tranching is used to create different classes of securities based on the creditworthiness of the underlying mortgages The senior tranche ...View the full answer
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