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Basic Question 5 of 8
In a CMO structure with several PAC tranches that pay off sequentially, the structure effectively becomes ______ once all the support tranches are paid off.
B. a typical sequential-pay structure
C. a Z-tranche
A. a new PAC structure, wherein the PAC tranche that will be paid off first becomes the support tranche
B. a typical sequential-pay structure
C. a Z-tranche
User Contributed Comments 3
| User | Comment |
|---|---|
| katybo | Busted PAC |
| danlan2 | Busted or broken PAC. |
| endurance | I'm busted |
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
describe types and characteristics of residential mortgage-backed securities, including mortgage pass-through securities and collateralized mortgage obligations, and explain the cash flows and risks for each type
CFA® 2025 Level I Curriculum, Volume 4, Module 19.