Question: QUESTION 5 Mark all the true statements about CMOs: CMO can be agency or non-agency MBS CMO can have several classes (tranches) of securities backed

QUESTION 5

  1. Mark all the true statements about CMOs:

    CMO can be agency or non-agency MBS

    CMO can have several classes (tranches) of securities backed by the same pool of mortgages

    In a sequential pay CMO, the tranche that gets paid last assumes the least default risk

    In a sequential pay CMO with just an A and B tranches, all tranches get principal payments in the first month

    In a sequential pay CMO, the tranche that gets paid off first is considered the safest

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