Quadiary Cluster

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Quadiary clusters developed in the emerging markets of structured financial products, specifically collateralized debt obligations (CDOs) and collateralized mortgage obligations (CMOs).

A quadiary cluster represents two related pairs of floater and inverse-floater tranches that are derived from a fixed-rate tranche. Specifically, each cluster will contain the following tranche types:

  1. Floating-rate tranche
  2. Inverse floating-rate tranche
  3. Floating-rate interest-only tranche
  4. Inverse floating-rate interest-only tranche