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:
- Floating-rate tranche
- Inverse floating-rate tranche
- Floating-rate interest-only tranche
- Inverse floating-rate interest-only tranche