1. The CDX.NA.HY Index (with 100 names) Tranches has an equity (absorbing the first 10% of defaults in the index), a junior mezzanine (absorbing the next 5%), a senior mezzanine (absorbing the next 10%), a junior senior (absorbing the next 10%) and a super senior tranche (absorbing the last 65% of defaults in the index).

Assuming a name in the index defaults, with recovery rate 40%

1. Calculate the payout from the protection sellers of the equity tranche
2. Calculate the new detachment for equity tranche