- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 45. Introduction to Asset-Backed Securities
- Subject 2. The Securitization Process
CFA Practice Question
The senior-subordinate structure of a pass-through security is used to redistribute ______.
B. prepayment risk
C. both credit risk and prepayment risk
A. credit risk
B. prepayment risk
C. both credit risk and prepayment risk
Correct Answer: A
This is referred to as credit tranching.
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