Suppose a trust is established to securitize $100 million in auto loans that paid 13% interest and
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Suppose a trust is established to securitize $100 million in auto loans that paid 13% interest and the average rate paid on the tranches issued was 10%, whereas financial guarantees to protect against default on the loans cost 1.5%. How much money would the creator of the trust have available to pay for loan servicing and profits if the financial guarantee was purchased?
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Related Book For
Financial Institutions, Markets And Money
ISBN: 1704
12th Edition
Authors: David S. Kidwell, David W. Blackwell, David A. Whidbee, Richard W. Sias
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