Investors in securitization schemes are constantly weighing up between risk and return. Some investors have a high appetite for risk and willing to gamble their investment. Others are more risk averse. How is this heterogeneity in investors risk/return preferences satisfied a in the investment world?

a. By investing in tax havens where your government is not aware of your investments.

b. by tranching to create senior and junior obligations of debt issued by special purpose c. by paying in cash to give you a higher return on your investment. d. by paying a credit rating agency to provide you with ratings you think are appropriate.