fixed income: reading 59: page528 Q31: in the term of option ask, question, reading, income

maxmeomeo

for question 31, it ask about which tranche is likely to be the most expensive in terms of option cost:
why I feel it should ask “in the term of OAS ” ? Thanks.

spreads

just a different way of measuring it….an expensive tranche will have a high option cost and a low OAS or “option-removed spread” better name for it if that helps