1. A mortgage pool is formed with mortgages with the following characteristics and assumptions:

Each mortgage has a balance of $64006

There are 82 mortgages in pool and all enter it at origination

Each mortgage has a 6% interest rate and are 10 year FRM with annual payments

Servicing and guarantee fee rate (total when adding both rates): 0.2%

No prepayment

What is the servicing and guarantee fee payment in year 1? Write your answers into rounded cents. For example, if you get 1,421,333.321544, write in 1421333.32

2. A MPT is being issued backed by a mortgage pool that consists of 100 mortgages with an average balance of $150,000. Mortgages are 10 year FRMs with annual payments. The mortgage rate in all of them is 5%. Assume that there is no prepayment and no servicer/guarantee fee in the projected cashflows of the mortgage pool. If the investor has a 10% discount rate, what will be their valuation of the MPT at origination be compared to the pool's par value at origination ($15,000,000)?

		Higher
		Lower
		Equal
		Cannot be determined with the information given