Different levels of credit risk

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For each of the statements below, assess whether the statement is TRUE (always correct), FALSE (always wrong) or UNCLEAR (meaning correct under some circumstances, wrong under other circumstances to define)., provide an explanation / illustration of why this is the case. Without an explanation or with an explanation that is off topic or with an explanation that shows serious confusion and misunderstanding, you will receive 0 marks, even if your conclusion was correct.

Your answers must be entirely in words with no balance sheet, no diagram and no equations. The answer must reflect the content of the course and cannot use an outside source. Using copy/paste is strictly forbidden.

a) The spread strategy of hedge funds can generate a gain in spite of share market prices going down.

b) The pool of securitised loans is divided into several tranches with different levels of credit risk.

Reference no: EM133254064

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