CFA CFA Level 2 Under what circumstances would the effective collar of PAC tranches widen?

Under what circumstances would the effective collar of PAC tranches widen?

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    • Avatar of vincenttvincentt
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        • CFA Level 3
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        As far as I’m aware, the support tranche absorbs both excessive and insufficient prepayments (that’s definitely in the text). However, i’m not too sure if lower than expected prepayments are considered a problem, unless the PACs are not receiving their full scheduled payment.

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