问题如下：
For a given CDO, which of the following tranches is most likely to have the highest expected return?
选项：
A. Equity.
B. Senior.
C. Mezzanine.
解释：
A is correct. The expected returns of the tranches vary according to the perceived credit risk, with the senior tranches having the highest credit quality and the junior tranches the lowest. Thus, the senior tranches have the lowest expected returns and the junior tranches have the highest. The most junior tranche is sometimes called the “equity tranche.”
B is incorrect because the senior tranches in a CDO have the lowest expected returns and the junior (or equity) tranches have the highest.
C is incorrect because the senior tranches in a CDO have the lowest expected returns and the junior (or equity) tranches have the highest. A mezzanine tranche is intermediate between the senior and junior tranches.
