• 2022-06-19
    Which of the following describes the waterfall typically used for mortgages pre-crisis?
    A: A distribution of cash flows to tranches with priority given to tranche with the highest rating
    B: A distribution of cash flows to tranches in proportion to their outstanding principals
    C: A distribution of losses to tranches so that tranches bear losses in proportion to their outstanding principals
    D: None of the above