Question: 22. Suppose that a PAC bond is created using prepayment speeds of 90 PSA and 240 PSA and the average life is 5 years.Will the

22. Suppose that a PAC bond is created using prepayment speeds of 90 PSA and 240 PSA and the average life is 5 years.Will the average life for this PAC tranche be shorter than, longer than, or equal to 5 years if the collateral pays at 140 PSA over its life? Explain your answer.

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