The Following Information Is for a Collateralized Mortgage Obligation (CMO)

question 95

Multiple Choice

The following information is for a collateralized mortgage obligation (CMO) .Tranche A has a face value of $50 million and pays 6 percent annually.Tranche B has a face value of $50 million and pays 8 percent annually.All mortgages have maturities of 30 years. What are the annual payments promised to Tranche A and Tranche B, respectively, assuming no prepayments and non-amortization?

• A)$3,632,446; $4,000,000.
• B)$4,000,000; $3,000,000.
• C)$3,000,000; $4,000,000.
• D)$3,632,446; $4,441,372.
• E)$4,441,372; $3,632,446.

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