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A PO and IO class of securities is formed backed by a $7,500,000 pool of 10-year FRMs making annual payments with a 10% interest rate.
A PO and IO class of securities is formed backed by a $7,500,000 pool of 10-year FRMs making annual payments with a 10% interest rate. There are no prepayments or servicer/guarantee fee. What is the present value of the PO class if the discount/market rate is 9%? Excel is recommended for this problem
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