A collateralized mortgage obligation security (CMO) is writing upon a pool of mortgage loans with face value of $100 million and interest rate 10% per year. This CMO has three tranches: tranche A, tranche B, and tranche Z. Tranche A has the highest priority to claim cash flows from this CMO. Tranche A has a face value of $10 million, a two-year maturity, and a coupon rate of 3% Investors will receive two equal payments from tranche A at end of each year. Tranche B has a face value of $ 30 million, a five- year maturity, and a coupon rate of 7%. Tranche Z has a face value of $60 million, a ten-year maturity, and a coupon rate of 12% Investors of tranche B will only receive coupon payment after tranche A is fully paid. Investors of tranche Z will start to receive payments only after tranche a is fully paid. Interest rate is 5% per year. Please find the residual cash flow at the end of the first year Multiple Choice 3.12 million 2.72 million 1.21 million 0.75 million A collateralized mortgage obligation security (CMO) is writing upon a pool of mortgage loans with face value of $100 million and interest rate 10% per year. This CMO has three tranches: tranche A, tranche B, and tranche Z. Tranche A has the highest priority to claim cash flows from this CMO. Tranche A has a face value of $10 million, a two-year maturity, and a coupon rate of 3% Investors will receive two equal payments from tranche A at end of each year. Tranche B has a face value of $ 30 million, a five- year maturity, and a coupon rate of 7%. Tranche Z has a face value of $60 million, a ten-year maturity, and a coupon rate of 12% Investors of tranche B will only receive coupon payment after tranche A is fully paid. Investors of tranche Z will start to receive payments only after tranche a is fully paid. Interest rate is 5% per year. Please find the residual cash flow at the end of the first year Multiple Choice 3.12 million 2.72 million 1.21 million 0.75 million