What is the pronunciation of "tranche"?
tranche
noun
How to pronounce tranche?
/trɑnʃ/
What is the definition of tranche?
nouna portion of something (especially money)
What is the definition of tranche?
- A tranche is a portion of a structured financial product, such as a bond or mortgage-backed security, that is divided into smaller pieces and offered to investors.
What are some synonyms for tranche?
- Slice
- Portion
- Segment
What are some examples of tranche in finance?
- Collateralized Debt Obligations (CDOs)
- Mortgage-backed Securities (MBS)
- Asset-backed Securities (ABS)
- Structured Investment Vehicles (SIVs)
How are tranches created?
- Tranches are created by dividing a pool of assets or liabilities into different classes based on risk, return, or other characteristics.
What is the purpose of creating tranches?
- The purpose of creating tranches is to attract different types of investors with varying risk appetites and investment objectives.
What is the role of tranches in risk management?
- Tranches can help in risk management by transferring the risk associated with the underlying assets to different investors based on their risk tolerance.
What is the difference between senior tranches and junior tranches?
- Senior tranches have a higher priority of payment and are paid first in case of cash flows, while junior tranches have a lower priority and are paid last.
What is sequential tranching?
- Sequential tranching is a method of structuring tranches where the cash flows are distributed sequentially to different tranches, with the first tranche receiving payments until it is fully paid off before the cash flows are allocated to the next tranche.
What is pro-rata tranching?
- Pro-rata tranching is a method of structuring tranches where the cash flows are distributed proportionally to different tranches based on their initial investment amounts.
Are tranches only used in finance?
- No, tranches can also be used in other industries and contexts to refer to divided portions or segments.
