medium · Asset-Backed Securities collateral
An analyst is calculating the 'Excess Spread' for an auto ABS pool. Given: Pool WAC = 12.0%, Servicing Fee = 1.0%, Weighted Average Bond Coupon = 4.5%, and Annualized Net Losses = 3.5%.
What is the net excess spread available to build OC or flow to the residual?
- 7.5%.
- 3.0%.
- 11.0%.
- 6.5%.
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