Support tranches are most appropriate for investors who are:
A) concerned about their exposure to extension risk.
B) concerned about their exposure to concentration risk.
C) willing to accept prepayment risk in exchange for higher returns.

Question

Quizplus · Accepted Answer

Support tranches are designed to absorb prepayment risk, offering potentially higher returns to investors willing to accept this risk.

Support Tranches Are Most Appropriate for Investors Who Are