CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

When an ABS ((asset-backed security) is structured to distribute prepayment risk, it is called ______.

I. prepayment tranching
II. credit tranching
III. time tranching
A. I only
B. I and III
C. II only
Explanation: Prepayment risk is uncertainty about the cash flow among different bond classes.

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