Assume That the CDX-ITraxx Index Has 125 Names in It

question 15

Multiple Choice

Assume that the CDX-iTraxx index has 125 names in it, for a total notional of $100,000,000. If the recovery rate on default of any name is 40%, at least how many names must default for the 3-7% tranche of the CDO to be wiped out?

• A) 7
• B) 8
• C) 15
• D) 23

---

Definitions:

Superior Performance

Exhibiting performance levels that significantly exceed the standard or norm in a particular area or activity.

Motivation Levels

Refers to the intensity and persistence of an individual's effort to achieve a specific goal.

Sarbanes-Oxley Act

A U.S. law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.

Code Of Ethics

A set of principles designed to guide members of a profession, organization, or group in conducting their actions with honesty and integrity.