Question
$400 million of MBBs are issued against a $500 million pool of mortgages (overcollateralization is $100 million). There are 40,000 bonds issued, each with a
$400 million of MBBs are issued against a $500 million pool of mortgages (overcollateralization is $100 million). There are 40,000 bonds issued, each with a face value of $10,000. The MBB pays 7.5% coupon rate semiannually and matures in 15 years. What is the price of this MBB if the current interest rate is 6.5%?
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Investment Analysis and Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown
10th Edition
538482109, 1133711774, 538482389, 9780538482103, 9781133711773, 978-0538482387
