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2. You are given $200 million and an assignment to design ABS and ABS CDO that fit the following criteria: A default of 5% in

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2. You are given $200 million and an assignment to design ABS and ABS CDO that fit the following criteria: A default of 5% in the collateral mortgages will wipe out 50% of the ABS equity tranche, and additional 6.25% default will wipe out 50% of the ABS CDO equity tranche, an additional $5,000,000 default will wipe out 50% of the ABS CDO mezzanine. ABS CDO senior tranche is twice the size of the ABS CDO mezzanine. Draw a chart of ABS and ABSCDO tranches and allocate appropriate $ amounts

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