What is the weighted average life

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Question - You buy an A-tranche sequential with only 4 periods (the bond pays monthly) of expected cash flow remaining. The notional amount is $140 million and the total principal received is expected to be (in millions and in chronological order): $25, $32, $38, $45. What is the weighted average life?

a. 0.38 years

b. 0.56 years

c. 2.3 years

d. 0.23 years

Reference no: EM133028121

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