Question: If a CMO has 3 tranches, A, B, and Z (an accrual tranche), as well as a residual class, answer the following question? If the

If a CMO has 3 tranches, A, B, and Z (an accrual tranche), as well as a residual class, answer the following question?

If the prepayment on a pool of mortgages decreases from CPR 10% to CPR 5%, what would happen to the expected maturity of the A class?

a.Increase
b.

Decrease
c.

Stay the same
d.

Cannot be determined from information given

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