Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1) A pool of mortgages contains 3.75%, 30-year loans with the total beginning balance of $99.57 million. In the first month, the total payments from

1) A pool of mortgages contains 3.75%, 30-year loans with the total beginning balance of $99.57 million. In the first month, the total payments from the pool were $495.2 thousand. What are the total prepayments, to the nearest $0.01 thousand? E.g., if your answer is $25,345.39, record it as 25.35. Assume no defaults.

2) A pool of mortgages contains 3%, 15-year loans with the total beginning balance of $100 million. The pool backs 90 principal-only (PO) shares and 104 interest-only (IO) shares. Monthly expenses and fees amount to 0.04% of the beginning-of-the-month balance (they are subtracted from the interest portion). In the first month, the total payments from the pool were $699.7 thousand. What was the cash flow per PO share (to the nearest dollar)? Assume no defaults.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Tail Risk Hedging Creating Robust Portfolios For Volatile Markets

Authors: Vineer Bhansali

1st Edition

0071791752,0071791760

More Books

Students also viewed these Finance questions