Question: 10. The following CMO structure has 10% backed collateral Tranche Par amount (millions) Coupon rate (%) A 400 7.5 B 300 6.5 C 200 7.25

10. The following CMO structure has 10% backed collateral

Tranche Par amount (millions) Coupon rate (%)

A 400 7.5

B 300 6.5

C 200 7.25

If the client wants the notional IO with a coupon rate of 7%

Calculate the nominal amount.

show calculations and formula please

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