Question
A CMO has 3 tranches, A, B, and Z (an accrual tranche), as well as a residual class. If the prepayment in the pool of
A CMO has 3 tranches, A, B, and Z (an accrual tranche), as well as a residual class. If the prepayment in the pool of mortgages that supports the CMO increased from CPR 5% to CPR 10%, what would happen to the expected maturity of the B class?
| Cannot be determined with the information given | ||
| Increase | ||
| Decrease | ||
| Remain the same |
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Financial Accounting A Focus On Interpretation And Analysis
Authors: Richard F Kochanek, A Douglas Hillman
7th Edition
1111061750, 9781111061753
