Z Class Is

question 53

Multiple Choice

Z 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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Definitions:

Face Validity

The extent to which a test or measure appears effective in terms of its stated aims, based on subjective judgment rather than empirical evidence.

Development Cycle

Refers to a series of stages through which a project, product, individual, or organism passes during its lifetime, encompassing phases from initiation to completion or birth to death.

Psychopathic Deviate

A term often related to measures in personality assessments that indicate a tendency towards psychopathic behavior including lack of empathy, deceitfulness, and impulsivity.

Paranoia

A mental condition characterized by delusions of persecution, unwarranted jealousy, or exaggerated self-importance, typically elaborated into an organized system.