Question

In a securitization structure, time tranching provides investors with the ability to choose between:

1) Different maturity dates
2) Different interest rates
3) Different credit ratings
4) Different payment schedules

Answer 1

Time tranching in a securitization structure allows investors to choose between different maturity dates, interest rates, credit ratings, and payment schedules.

Step-by-step explanation:

In a securitization structure, time tranching provides investors with the ability to choose between:

1. Different maturity dates
2. Different interest rates
3. Different credit ratings
4. Different payment schedules

Time tranching is a process used in securitization where cash flows from the underlying assets are divided into different tranches based on their maturity dates. Each tranche has its own set of characteristics, such as interest rates, credit ratings, and payment schedules. This allows investors to select the tranche that best suits their investment preferences and risk appetite.