easy · Asset-Backed Securities
In a sequential-pay ABS structure with Classes A, B, and C, which tranche will typically have the shortest Weighted Average Life (WAL)?
- Class B, because it sits in the middle of the capital stack.
- Class A, because it receives all principal collections until it is fully retired.
- Class C, because it is the most junior and absorbs losses first.
- All classes will have the same WAL if the structure is sequential.
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