Guo, Guixia; Wang, Frank Yong; Wei, Xu - In: Economics Letters 124 (2014) 2, pp. 222-226
potential buyers hold diverse beliefs. We find that the tranching process is beneficial to the issuer because it increases the … total sale price. We also consider the optimal tranching strategy that maximizes the revenue of the issuer. This helps … explain the widespread use of the tranching technique in the asset securitization practice. Our findings are also enlightening …