Goldman Sachs' GSAMP Trust Was Able to Create AAA-Rated Securities

question 3

Multiple Choice

Goldman Sachs' GSAMP Trust was able to create AAA-rated securities by:

• A)separating the mortgage portfolio into tranches and assigning the tranches to share risks of default equally.
• B)not disclosing the risks clearly.
• C)guaranteeing or protecting some tranches.
• D)separating the mortgage portfolio into tranches and assigning the A-1, A-2, and A-3 tranches last in order, after the M-1 to M-7 and B-1 to B-3 tranches, to suffer losses if a default occurred.
• E)All of the above

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Definitions:

Intestate

Having died without leaving a valid will.

Testator

A deceased person who died leaving a will.

Revoke

To officially cancel or withdraw a right, permission, or offer, rendering it no longer valid or in effect.

Partial Revocation

A concept in wills and trusts law where a testator can revoke or cancel a portion of the will while leaving the rest intact.