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Collateralized mortgage obligation (CMO) tranche A has been created to have the most predictable near-term principal pay off. A tranche set up in this way will have

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Answer: d. a lower yield

Step-by-step explanation:

When a security is said to bring back predictable returns it means the security is of lower risk. A CMO tranche that has the most predictable near-term principal pay off is therefore the one with the a lower risk.

Riskier securities command higher yield than less riskier ones as a way to compensate the holder for taking on more risk. With tranche A having the lower risk, it will have a lower yield.

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