Question: Consider a CMO structure with one PAC class and one support tranche outstanding. Also, assume that the prepayment speed is higher than the upper collar

Consider a CMO structure with one PAC class and one support tranche outstanding. Also, assume that the prepayment speed is higher than the upper collar on the PAC. Which of the following statements is most accurate? The average life of the support tranche will contract PAC tranche has no risk of prepayments average life of the support tranche will extend average life of the PAC tranche will extend

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