YAhmed

theCFAway Wrote:
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> hey-so if accrual tranches don't get paid anything
> until the other tranches get paid off, then
> wouldn't this statement, "interest payments are
> paid to each bond class periodically" be
> incorrect. it was one of the choices on the sample
> exam and this statement was true according to the
> answer key.


It is correct. All they are saying is that interest is not paid off to the aaccrual tranch as cash, it gets added to principal, but it does get paid just like all other tranches.