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If a CMO has 3 tranches, A, B, and Z (an accrual tranche), as well as a residual class, answer the following question? If the

If a CMO has 3 tranches, A, B, and Z (an accrual tranche), as well as a residual class, answer the following question?

If the prepayment on a pool of mortgages increases from PSA 100 to PSA 150, what would happen to the expected maturity of the Z class?

Increase, decrease or stay the same?

Increase

Decrease

Stay the same

Cannot be determined from information given

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