Question
1. What pair of CMOs DO NOT need to be issued together when backed by the same mortgage pool? Tranche A and B (Senior and
1. What pair of CMOs DO NOT need to be issued together when backed by the same mortgage pool?
| Tranche A and B (Senior and Junior Tranche) | ||
| TAC and companion tranche | ||
| Inverse Floater and TAC | ||
| IO and PO |
2.
What kind of risk is a PAC investor protected from when the mortgage pool's prepayment speed is between the upper and lower collar?
| Prepayment/Contraction and Extension Risk | ||
| None of the Above | ||
| Only Prepayment/Contraction Risk | ||
| Only Extension Risk |
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Personal Finance
Authors: Jeff Madura
3rd Edition
0321357973, 978-0321357977
