A Security That Is Sub-Divided into Securities Called Tranches Is

question 45

Multiple Choice

A security that is sub-divided into securities called tranches is called a

• A)principal-only strip
• B)asian lookback option
• C)range mortgage strip
• D)collateralized mortgage obligation
• E)none of the above

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Definitions:

Exact Simple Interest

Interest calculated precisely based on the principal amount, a fixed interest rate, and the number of days between payments.

365-Day Year

A method used in finance that assumes all years have 365 days for the purpose of interest calculation.

High-Speed Copy Machine

An office machine designed for rapid copying of documents and images, capable of producing numerous copies within a short period.

Ordinary Simple Interest

A method of calculating interest where the interest charge is computed only on the principal amount, without compounding over a specified time period.