The variability in the average life of the PAC tranche of a CMO relative to the average

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The variability in the average life of the PAC tranche of a CMO relative to the average life of the mortgage pass-through securities from which the CMO is created is:

A. Lower.

B. The same.

C. Higher.

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Fixed Income Analysis

ISBN: 9781119850540

5th Edition

Authors: Barbara S. Petitt

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Question Posted: Nov 04, 2023 11:10 PM

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The variability in the average life of the PAC tranche of a CMO relative to the average

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A is correct The purpose of creating different bond classes in a CMO is to provide a riskr...View the full answer

Fixed Income Analysis

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