These bonds of a CMO have some prepayment protection and expected durations of five to seven years depending on the level of interest rates and are primarily purchased by pension funds and life insurance companies.
A)Class A bonds.
B)Class R bonds.
C)Class C bonds.
D)Class Z bonds.
E)Class B bonds.

Question

Quizplus · Accepted Answer

Class B bonds of a Collateralized Mortgage Obligation (CMO) offer some level of prepayment protection and have expected durations that make them appealing to investors like pension funds and life insurance companies, who are typically looking for medium-term investments that align with their liabilities and investment strategies.

These Bonds of a CMO Have Some Prepayment Protection and Expected