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AAFM Exam CWM_LEVEL_2 Topic 6 Question 82 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam
Question #: 82
Topic #: 6
[All CWM_LEVEL_2 Questions]

Section A (1 Mark)

The risk that occurs when the index used for determination of interest earned on the CDO trust collateral is different from the index used to calculate the interest to be paid on the CDO trust is known as______________.

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Suggested Answer: C

by Carmela at Jul 09, 2024, 10:48 AM

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Valene
2 months ago
Basis Risk, the bane of CDO enthusiasts. It's like playing a game of tug-of-war between the collateral and the payouts. Better bring your A-game to this one!
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Eun
10 days ago
D) Spread Risk
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Shawn
13 days ago
C) Default Risk
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Ronald
14 days ago
D) Spread Risk
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Frederick
21 days ago
B) Yield Curve Risk
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Harris
1 months ago
C) Default Risk
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Casie
1 months ago
B) Yield Curve Risk
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Hyman
1 months ago
A) Basis Risk
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Avery
1 months ago
A) Basis Risk
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Marti
2 months ago
Ah, Basis Risk. The classic culprit behind those pesky interest rate headaches. Just when you thought you had it all figured out, the indices go and pull a fast one on you.
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Carin
2 months ago
Hmm, Basis Risk sounds about right. Keeping those indices in sync is like herding cats, but it's a crucial step in the CDO game.
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Dominque
2 months ago
Basis Risk? That's the one, I can smell it! Gotta watch out for those mismatched indices, they'll bite you like a hungry piranha.
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Kris
1 months ago
B) Yield Curve Risk
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Bernardo
2 months ago
A) Basis Risk
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Gilma
2 months ago
I'm not sure, but I think it could also be D) Spread Risk.
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Artie
3 months ago
I agree with Amalia, Basis Risk makes sense in this context.
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Amalia
3 months ago
I think the answer is A) Basis Risk.
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