1. If a bond has a credit rating of A, which of the following is...
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Finance
1.
If a bond has a credit rating of A, which of the following is not true:
A) The bond has more risk than a government bond
B) The bond is considered a junk bond
C) The bond is less risky than a BBB bond
D) The bond is currently making all of its debt payments
2.
Assume you have a CDO which had an equity trache that is 5% of all assets and a Mezzanine tranche that is 20% of all assets and a Senior tranche that is 75% of all assets. If the firm assets lose 10% of their total value, what does this mean for the Mezzanine tranche?
A) They will not be affected
B) They will lose 25% of their investment
C) They will lose 50% of their investment
D) They will lose 100% of their investment
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