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Assume there is a $10 million 4% 30yr CMO Sequential that pays monthly. You bought a piece of tranche A, which has a $3 million
Assume there is a $10 million 4% 30yr CMO Sequential that pays monthly. You bought a piece of tranche A, which has a $3 million notional. With prepayment speeds at 400 PSA, when will tranche A be paid off (what period)? (Hint, you don't need to model any of the the other tranches. This is only asking about tranche A.) a. 29 b. 3 c. 360 d. 1.54
Assume there is a $10 million 4% 30yr CMO Sequential that pays monthly. You bought a piece of tranche A, which has a $3 million notional. With prepayment speeds at 400 PSA, when will tranche A be paid off (what period)? (Hint, you don't need to model any of the the other tranches. This is only asking about tranche A.)
a. 29
b. 3
c. 360
d. 1.54
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