easy · FRM Part 2 Credit Risk
Formula-and-meaning check before application in Credit Risk.
Within Credit Risk — Structured Finance & Securitization, which statement correctly describes Credit enhancement?
- portfolio-loss level at which a tranche begins to absorb losses
- risk that borrowers repay earlier than expected and alter security cash flows
- structural or external protection that improves a tranche’s credit quality
- pooling financial assets and issuing claims backed by their cash flows
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