Question: Consider the following CMO structure backed by 9% collateral: Tranche Par Amount (in millions) Coupon Rate (%) A $300 7.00% B $200 6.75% C $200

Consider the following CMO structure backed by 9% collateral:

Tranche

Par Amount (in millions)

Coupon Rate (%)

A

$300

7.00%

B

$200

6.75%

C

$200

7.25%

D

$250

7.75%

Suppose that a client wants a notional IO with a coupon rate of 9%. Calculate the notional amount for this notional IO.

Group of answer choices

$66,666,667

$190,277,778

$155,555,556

$34,722,222

None of the above

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