Explanation:
Over-collateralization is a form of internal credit enhancement achieved when the nominal value of the collateral pool exceeds the nominal value of the issued securities. If the nominal value of the credit-sensitive assets in the collateral pool is exactly equal to the nominal value of the issued securities, the over-collateralization is zero.
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610.2. If the nominal value of the credit-sensitive assets in the collateral pool is exactly equal to the nominal value of issued securities, then which of the following is equal to zero?
A
First-loss piece
B
Excess spread
C
External credit enhancement
D
Over-collateralization
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