1. Assume nonamortization of principal and no prepayments. What are the total promised coupon payments to the three classes? What are the principal payments to each of the three classes for the first year If, over the first year, the trustee receives quarterly prepayments of $10 million on the mortgage pool, how are these funds distributed?
How are the cash flows distributed if prepayments in the first half of the second year are $20 million quarterly?