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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
10 hours 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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Marti
3 days 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
6 days 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
8 days 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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Gilma
14 days ago
I'm not sure, but I think it could also be D) Spread Risk.
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Artie
17 days ago
I agree with Amalia, Basis Risk makes sense in this context.
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Amalia
18 days ago
I think the answer is A) Basis Risk.
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