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1. Which of the following can cause positive feedback trading?
A. Stop-loss orders
B. Margin requirements
C. Irrational exuberance
D. All of the above
E. None of the above
3. When a mortgage-back security is divided into multiple tranches, which tranche is last in line for being paid?
A. Senior tranche
B. AAA tranche
C. Mezzanine tranche
D. AA tranche
E. None of the above
4. What is a CDO of CDO (or CDO2) ?
A. A tranche of a CDO that is divided that further into tranches, each sold as a security
B. Double A tranches with large capital requirements
C. Double A tranches that are very safe investments
D. Equity tranches retained by the originators
E. None of the above
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