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Question

A mortgage company is issuing a CMO with three tranches, with the principal and coupon rate given in the table

below. When issued, the weighted average coupon on the CMO will be the following.

 

Tranche            Principal          Coupon

Rate

A         $         40,000,000       7.37    %

B                   30,000,000       10.00   %

Z                   39,000,000       11.00   %

Group of answer choices



10.08%


11.00%

 

 


9.25%


10.00%

 

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