- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 18. Asset-Backed Security (ABS) Instrument and Market Features
- Subject 4. Collateralized Debt Obligations
CFA Practice Question
What is the cheapest funding source for a CDO?
B. Mezzanine tranche
C. Equity tranche
A. Senior tranche
B. Mezzanine tranche
C. Equity tranche
Correct Answer: A
The required rate is the lowest for the senior tranche of a CDO.
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