medium · Asset-Backed Securities
An ABS has a weighted average coupon (WAC) of 8.0%, a servicing fee of 1.0%, and a weighted average bond coupon of 4.5%.
If the annualized charge-off rate is 1.5%, what is the excess spread?
- 1.0%
- 3.5%
- 2.5%
- 7.0%
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