Which of the Following Is True as the Correlation Between

question 20

Multiple Choice

Which of the following is true as the correlation between mortgage defaults increases?

• A) Equity tranches are almost certain to incur losses
• B) Senior tranches become more likely to incur losses
• C) The expected number of defaults increases
• D) Equity tranches are unaffected

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Definitions:

Combination Thereof

A phrase used to indicate that a particular description or specification can involve a mix or combination of the mentioned elements.

Patent

A form of intellectual property right that grants an inventor the exclusive right to exclude others from making, using, selling, and importing an invention for a certain period of time.

Assignment

The transfer of rights, property, or obligations from one party to another, typically used in contracts or financial transactions.

Injurious Falsehood

A false statement made maliciously that causes damage to another’s property, business, or reputation.