In Regard to a CMO, Which of the Following Have

question 57

Multiple Choice

In regard to a CMO, which of the following have the shortest average life with a minimum of prepayment protection?

• A)Class A bonds.
• B)Class B bonds.
• C)Class C bonds.
• D)Class Z bonds.
• E)Class R bonds.

---

Definitions:

Straight-Line Depreciation

A tactic for apportioning the cost of a physical asset over its effective lifespan in identical yearly expenditures.

Fixed Costs

Expenses that do not change with the level of goods or services produced over a short period.

Operating Cash Flow

A measure of the amount of cash generated by a company's normal business operations, indicating whether a company can generate sufficient positive cash flow to maintain and grow its operations.

DOL

Degree of Operating Leverage, which measures a company's sensitivity of operational income to its sales levels, indicating the proportion of fixed versus variable costs.