In Early 1987, Stripped Mortgage-Backed Securities Began to Be Issued

In early 1987, stripped mortgage-backed securities began to be issued allocating all the interest to one class [called the ________ class] and the entire principal to the other class [called the ________ class].

A) principal-only (PO) ; interest-only (IO)
B) interest-only (IO) ; prepayment-only (PO)
C) interest-only (IO) ; principal-only (PO)
D) stripped-only (SO) ; payment-only (PO)

Correct Answer:

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