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Suppose the subprime car loans portfolio undergoes a 15% loss, what is the loss suffered by (a)the equity tranche of the CDO? (b)the mezzanine tranche

Suppose the subprime car loans portfolio undergoes a 15% loss, what is the loss suffered by

(a)the equity tranche of the CDO?

(b)the mezzanine tranche of the CDO?

Explain in words how you obtained these numbers.

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