How many of the following statements concerning the capital structure in a securitization are most likely correct?
I.The mezzanine tranche is typically the smallest tranche size.
II.The mezzanine and equity tranches typicaUy offer fixed coupons.
III.The senior tranche typically receives the lowest coupon.
A.No statements are correct.
B.One statement is correct.
C.Two statements are correct.
D.Three statements are correct.
Senior tranches are perceived to be the safest,so they receive the lowest coupon.The equity tranche receives residual cash flows and no explicit coupon.Although the rnezzanine tranche is often thin,the equity tranche is typically the thinnest slice.