5. Credit Swatch just structured a $1 billion CMO with $750 million allocated to the PAC class. The deal is off FNMA 30-year 4.5% coupon MBS. The companion class collateral will consist of a floater, an inverse IO and a super PO. In orer to sell the floater at a 35 bp DM (discount margin) off 1-month LIBOR, the floater must have a 6.25% cap. a) What balance amount is allocated to the companion class? b) In order the create a 6.25% cap on the floater how much principal is allocated to the floater and how much is allocated to the super PO? c) What is the cap on the inverse IO? d) What is the coupon formula for the inverse IO? e) Suppose LIBOR is 3%, what are the floater and inverse IO coupons?