Hi, did you guys realized that on Mock 2, there are two Pac tranches with exactly the same PAC window, 13 month. But CFAI chose PAC I over PAC3. My question: 1. What exactly is PAC window? it is just scheduled principle repayment openup, right? 2. does it have something to do with the average life of the PAC tranche? like earlier repayment schedule or later repayment schedule? 3. do you think possibly CFAI is WRONG? input greatly appreciated…
Compare each PAC’s effective duraion and OAS, and option cost with those of tothe PAC’s.