Am I missing something here? Security A has a WAM of 167 (as per the answer to 43) Security B has a WAM of 136 But the answer says security B is a higher risk because it has a longer avg maturity? EDIT: given the 3 possible answers, and no other info i would go with answer c (the cfai answer) but the question still remains: is weighted avg life a term that ive missed and not the same as wam?
WAM is solely a function of the underlying collateral based on certain assumptions, where “average life or average maturity” takes into account collection/prepays etc, dont have the book in front of me, but if given average life, use it!
nice one