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51.1 Assume a 30-year fully-amortizing mortgage loan with original balance of $100,000 and current coupon rate of 6.0% (i.e., Tuckman's example). But add an assumption
51.1 Assume a 30-year fully-amortizing mortgage loan with original balance of $100,000 and current coupon rate of 6.0% (i.e., Tuckman's example). But add an assumption that without the prepayment option the interest rate (monthly compounded YTM) would be 5.0%, if priced for its non-option credit quality. What is the value of the prepayment option
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