Question: A CMO is being issued with three tranches, with the principal and coupon rate given in the table below. When issued the weighted average coupon

A CMO is being issued with three tranches, with the principal and coupon rate given in the table below. When issued the weighted average coupon on the CMO will be 6.425%. What is the coupon rate for tranche A?

Tranche

Principal

Coupon Rate

A

$50,000,000

?%

B

$30,000,000

6%

Z

$20,000,000

10%

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