Which tranche in a collateralized mortgage obligation (CMO) structure is most suitable for an investor who expects interest rates to fall?

A floatingrate tranche.

An inverse floatingrate tranche.

The first tranche in a sequentialpay CMO.

An investor who would like an investment in a collateralized mortgage obligation (CMO) bond class with a stable average life will most likely select a:

support tranche in a CMO with a planned amortization class tranche.

planned amortization class (PAC) tranche in a CMO.

early (first) tranche in a sequentialpay CMO.

Which tranche in a collateralized mortgage obligation (CMO) structure is most suitable for an investor who is willing to take on significant contraction risk and extension risk in exchange for a higher expected rate of return?

A support tranche in a PAC bond structure.

The first tranche in a sequentialpay CMO.

An inversefloating rate tranche.

If an investor expects interest rates to go up, the investor buying a CMO security will most likely purchase:

the last tranche in a sequentialpay CMO.

a floatingrate tranche in a CMO.

a PAC tranche in a CMO.

In a CMO with a PAC tranche and a support tranche, the tranche that most likely has higher prepayment risk is:

the PAC tranche.

the support tranche.

neither, as both have roughly the same amount of prepayment risk.