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

question 98

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.

Grasp the significance of strategic, tactical, and operational planning in achieving organizational objectives.

Understand the role and importance of forecasting in planning and the management function.

Learn about the critical skills required for effective management and leadership.

Differentiate between efficiency and effectiveness in management practices.

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Definitions:

Machine Setups

The preparation and adjustments made to a machine before starting a production run, including configuration for new products or batches.

Product Costs

The total costs directly tied to the creation of a product, encompassing direct labor, direct materials, and manufacturing overhead.

Period Costs

Expenses that are not directly tied to production activities and are accounted for as expenses in the period they are incurred, such as selling, general, and administrative expenses.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the total expenses necessary to transform raw materials into finished goods.