This is an accrual class of a CMO that makes a payment to bondholders only when preceding CMO classes have been retired.
A)Class A bonds.
B)Class B bonds.
C)Class C bonds.
D)Class Z bonds.

Question

Quizplus · Accepted Answer

Class Z bonds are typically the most subordinate class in a CMO structure and are designed to receive no principal or interest payments until all previous classes of CMOs have been retired. Therefore, this fits the description given in the question. Class A, B, and C bonds do not have this characteristic.

This Is an Accrual Class of a CMO That Makes