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? (State your answer as a percentage, e.g. 20.1%)
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Handbook Of The Economics Of Finance
Authors: George M. Constantinides, Milton Harris, Rene M. Stulz
1st Edition
044459406X, 978-0444594068
