Assignment:
Q1. a. Why is it necessary for a nonagency mortgage-backed security to have credit enhancement?
b. Who determines the amount of credit enhancement needed?
Q2. a. What is meant by a senior-subordinated structure?
b. Why is the senior-subordinated structure a form of credit enhancement?
c. What is the limitation of a third-party guarantee as a form of credit enhancement?
Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.