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GARP 2016-FRR Exam - Topic 2 Question 22 Discussion

A trader for EtaBank wants to take a leveraged position in Collateralized Debt Obligations. If these CDOs can be used in a repo transaction at a 20% haircut, what is the maximum leverage factor for a transaction with the CDOs?
C) 3
A) 0.8
B) 1.5
D) 5

GARP 2016-FRR Exam - Topic 2 Question 22 Discussion

Actual exam question for GARP's 2016-FRR exam
Question #: 22
Topic #: 2
[All 2016-FRR Questions]

A trader for EtaBank wants to take a leveraged position in Collateralized Debt Obligations. If these CDOs can be used in a repo transaction at a 20% haircut, what is the maximum leverage factor for a transaction with the CDOs?

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Suggested Answer: C

by Page at Jun 16, 2026, 03:47 PM

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