A 5% $1,000 par value bond sells at $900 and matures in 10 years. What is the amount of each interest payment? a. $25 b. $45 c. $50 d. $90

A bond is selling at a premium. This indicates that:

The yield to maturity is greater than the nominal yield

The market price is less than the par value

Interest rates have decreased since the bond was issued

The nominal yield is less than the current yield

Which of the following CMOs has the MOST prepayment risk?

Sequential pay tranches

Accrual or Z tranches

Planned amortization class (PAC) tranches

Support or companion tranches