Finance Assignment | Professional Writing
May 29th, 2020
Mark all the true statements about CMOs:
Tranche stands for “slice” in french | ||
In a sequential pay CMO, all tranches get their interest payments in the first month except for Z-bonds | ||
CMO can have several classes (tranches) of securities backed by the same pool of mortgages | ||
In a sequential pay CMO, the tranche that gets paid last assumes the least default risk | ||
In a sequential pay CMO, the tranche that gets paid off first is protected against contraction risk
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