- CFA Exams
- CFA Exam: Level I 2021
- Study Session 14. Fixed Income (1)
- Reading 45. Introduction to Asset-Backed Securities
- Subject 5. Collateralized Mortgage Obligations
CFA Practice Question
Which of the following are forms of internal credit enhancements for an asset-backed security?
II. Guarantee by a corporation
III. Bond insurance
IV. Over-collateralization
I. Senior-subordinated structure
II. Guarantee by a corporation
III. Bond insurance
IV. Over-collateralization
Correct Answer: I and IV
User Contributed Comments 2
| User | Comment |
|---|---|
| carsonson | senior-subordinated structure = tranche struture ? |
| reccy | External= 3rd party guarantee. Bond insurance= insurance company guarantees against risk |