Which of these CMO bond issues has characteristics of both a zero-coupon bond and a regular bond?
A)Class A bonds.
B)Class B bonds.
C)Class C bonds.
D)Class Z bonds.
E)None of the options.

Question

Quizplus · Accepted Answer

Class Z bonds have characteristics of both a zero-coupon bond and a regular bond. They offer no coupon payment, like a zero-coupon bond, but are issued and traded at a discount and have a par value at maturity, like a regular bond.

Which of These CMO Bond Issues Has Characteristics of Both