A Four-Class CMO Has Class A,Class B,Class C,and the Residual

question 48

Multiple Choice

A four-class CMO has Class A,Class B,Class C,and the residual Class Z securities outstanding. Which class has the longest duration?

• A)Class A
• B)Class B
• C)Class C
• D)Class Z
• E)All have the same duration

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Definitions:

Eurodollar Transactions

Financial transactions involving U.S. dollars deposited in banks outside the United States, often used in international lending and finance.

Exchange Rate

The value of one currency for the purpose of conversion to another, indicating how much one currency is worth in terms of the other.

Supply And Demand

Economic model of price determination in a market, where the quantity of a good supplied by producers and the quantity demanded by consumers depend on the price level.

Currencies

Systems of money in common use, particularly in a nation or economic region, serving as a medium of exchange.