Question
Tranche Principal Coupon Rate A $40,000,000 9.25% B 30,000,000 10.00% Z 30,000,000 11.00% A mortgage company is issuing a CMO with three tranches, with the
| Tranche | Principal | Coupon Rate |
| A | $40,000,000 | 9.25% |
| B | 30,000,000 | 10.00% |
| Z | 30,000,000 | 11.00% |
A mortgage company is issuing a CMO with three tranches, with the principal and coupon rate given in the table above. What will be the weighted average coupon on the CMO when issued?
| a. | 11.00% | |
| b. | 10.00% | |
| c. | 9.25% | |
| d. | 10.28% |
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Personal Finance Version 3.1
Authors: Rachel S. Siegel
3rd Edition
1453334807, 978-1453334805
