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You buy an A-tranche sequential with only 4 periods (the bond pays monthly) of expected cash flow remaining. The notional amount is $140 million and
You buy an A-tranche sequential with only 4 periods (the bond pays monthly) of expected cash flow remaining. The notional amount is $140 million and the total principal received is expected to be (in millions and in chronological order): $25, $32, $38, $45. What is the WAL (weighted average life)? (Do not round any of the inputs.)
2.3 years
0.23 years
0.56 years
0.38 years
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