1.You buy an Interest Only Strip. The price at the time of purchase reflects a 12% expected annual prepayment rate. One hour after your purchase, you learn that it is actually not prepayment but default rate, and that only 80% of the defaulted balance can be recovered. The value of your security should?

2.BOA issues $100m in CMO. 30% of the issue is floater tranche with index = LIBOR (currently 2%) and margin = 1%. The remaining 70% is inverse floater tranche that is designed to keep the total cost of financing constant. The next year LIBOR goes up to 4%. What would be the interest paid to the floater tranche investors? Enter your answer in percent, but without percent sign.

PLEASE DONT ANSWER, ALREADY RESOLVED THANK YOU