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A collateralized mortgage obligation has three tranches with credit ratings of AAA, A, and BBB, respectively. The _____-rated tranche will have the highest yield. The

A collateralized mortgage obligation has three tranches with credit ratings of AAA, A, and BBB, respectively. The _____-rated tranche will have the highest yield. The _____-rated tranche will be paid off and retired first if there are a large number of prepayments.

A. ) AAA, AAA
B. ) AAA, BBB
C. ) BBB, AAA
D.) BBB, BB
B

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