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Please explain and show steps :) Given the ABS & ABS CDO shown below , what is the minimum loss on the portfolio of underlying
Please explain and show steps :)
Given the ABS & ABS CDO shown below , what is the minimum loss on the portfolio of underlying assets when:
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- Lower two ABS tranches have a 100% loss of principal?
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- Senior ABS tranche a 50% has loss of principal?
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- Equity ABS CDO tranche has a 100% loss of principal?
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- Mezzanine ABS CDO tranche has a 100% loss of principal?
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- Senior ABS CDO tranche has a 50% loss of principal?
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- Senior ABS CDO tranche has a 100% loss of principal?
- Why is it likely that the AAA-rated tranche of this ABS CDO is more risky than the AAA-rated tranche of the ABS?
- Why are the risks in ABS CDOs misjudged by the market? What did we learn about this in 2007?
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- Why is it likely that the AAA-rated tranche of this ABS CDO is more risky than the AAA-rated tranche of the ABS?
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- Why are the risks in ABS CDOs misjudged by the market? What did we learn about this in 2007?
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