Consider the following CMO:

- Tranche A issued for $12 million with a coupon of 6.5%

- Tranche B issued for $4 million with a coupon of 6.5%

- Z-Tranche issued for $4 million with a coupon of 6.5%

The securities are backed by a pool of fully amortizing 30-year fixed rate mortgages with WAC equal to 6.5% and monthly payments. There is assumed to be a 5% CPR in this pool and no servicing fee.

What does this graph represent?

which one below:

		Principal payment on each tranche
		Interest payment on each tranche
		Remaining balance on each tranche
		Cash flow to each tranche

14 D 12 B 10 Z 8 6 4 N 0 1 61 121 181 241 301 14 D 12 B 10 Z 8 6 4 N 0 1 61 121 181 241 301