- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 17. Fixed-Income Securitization
- Subject 2. The Securitization Process
CFA Practice Question
In a basic sequential pay structure, ______
B. each bond class receives periodic interest. However, all principal received is paid first to one bond class until it is fully paid off, and further principal received will go to the next bond class.
C. all principal and interest received is paid first to one bond class until it is fully paid off, and the principal plus interest received will go to the next bond class.
A. each bond class receives periodic interest and principal payments.
B. each bond class receives periodic interest. However, all principal received is paid first to one bond class until it is fully paid off, and further principal received will go to the next bond class.
C. all principal and interest received is paid first to one bond class until it is fully paid off, and the principal plus interest received will go to the next bond class.
Correct Answer: B
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