Suppose that the $1 billion of collateral in Question 14 was divided into a PAC bond with a par value of $800 million and a support bond with a par value of $200 million Will the PAC bond in this CMO structure have more or less protection than the PAC bond in Question 14 ...

The PAC bond in the structure of 800 million versus 200 million will have less protection that 700 m ...

Suppose that the $1 billion of collateral in Question 14 was divided into a PAC bond with

Question:

Suppose that the $1 billion of collateral in Question 14 was divided into a PAC bond with a of $800 million and a support bond with a of $200 million. Will the PAC bond in this CMO structure have more or less protection than the PAC bond in Question 14?
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...