Use the following information for the next four questions:

In a CDO structure, ABSs include $75\%$ senior tranches, $20\%$ Mezzanine tranches, and $5\%$ equity tranches. Then the Mezzanine tranches are further split into ABS CDO, with $75\%$ senior tranche, $20\%$ Mezzanine tranche, and $5\%$ equity tranche.

If the loss rate of the underlying subprime mortgage loans is $12\%,$ how about the loss to the senior tranche of the ABS CDO?

$5\%$

$35\%$

$13\mathrm{.}33\%$

$100\%$

$12\%$

The next three questions are:

$2.$ If the loss rate of the underlying subrime mortgage loans is $12\%,$ how about the loss to the mezzanine tranche of the ABS CDO?

$3.$ If the loss rate of the underlying subrime mortgage loans is $12\%,$ what is the loss to the mezzanine tranche of the ABS?

$4.$ If the loss rate of the underlying subrime mortgage loans is $7\%,$ what is the loss to the mezzanine tranche of the ABS?