7(iii) Explain what is meant by a collateralized debt obligation (CDO) if the CDO is based on and underlying package of $300 million of home loans yielding 8% interest and the CDO is split into four tranches. An equity tranche ($30 million), a junior tranche ($90 million), mezzanine tranche ($90 million) and a senior tranche ($90miillion). Comment on any credit rating of each tranche and apply an applicable rate of interest to each tranche you wish to apply to each of the 4 tranches.