-A Mortgage Company Is Issuing a CMO with Three Tranches

question 31

Multiple Choice

$$\begin{array} { c c r } \text { Tranche } & \text { Principal } & \text { Caupan Rate } \\\text { A } & \$ 40,000,000 & \mathbf { 9 . 2 5 \% } \\\mathrm { B } & 30,000,000 & 10.00 \% \\Z & 30,000,000 & 11.00 \%\end{array}$$
-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?

• A) 9.25%
• B) 10.00%
• C) 10.08%
• D) 11.00%