1. U have a Tranche of 100,000,000 and u are selling protection for 10-20 defaults. Assume that the coupon u are paying for this tranche is 10% For the 0-10 Tranche the coupon for the Tranche will be Hint. U don't need to calculate it just use ur common sense and what u have learned in class to guesstimate O greater than 10% O equal to 10% O less than 10% O NOne of the above
1. U have a Tranche of 100,000,000 and u are selling protection for 10-20 defaults. Assume that the coupon u are paying for this tranche is 10% For the 0-10 Tranche the coupon for the Tranche will be Hint. U don't need to calculate it just use ur common sense and what u have learned in class to guesstimate O greater than 10% O equal to 10% O less than 10% O NOne of the above
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Qd 151.
Transcribed Image Text:1. U have a Tranche of 100,000,000 and u are selling protection for 10-20 defaults. Assume that the coupon u are paying for this tranche is 10%
For the 0-10 Tranche the coupon for the Tranche will be
Hint. U don't need to calculate it just use ur common sense and what u have learned in class to guesstimate
Ogreater than 10%
O equal to 10%
O less than 10%
ONOne of the above
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