R Class Is

question 70

Multiple Choice

R class is:

• A)an accrual class of a CMO that makes a payment to bondholders only when preceding CMO classes have been retired
• B)the residual class of a CMO, giving the owner the right to any remaining collateral in the trust after all other bond classes have been retired plus any reinvestment income earned by the trust
• C)a bond that has some prepayment protection and expected durations of five to seven years depending on the level of interest rates
• D)a bond that has the shortest average life with a minimum of prepayment protection.They are, therefore, of no interest to investors seeking short-duration mortgage-backed assets

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