Answer both

106.2. A mortgage pool has a principal balance of $900 million and the weighted average coupon (WAC) of the the mortgages in the pool is 6.60%. In the first month, the coupon paid by the mortgage pool (principal plus interest) is $5.748 million. The prepayment assumption is 300% PSA. In the first month, what is the REDUCTION in the principal balance; that is, what is the sum of the schedule principal and the expected prepayment of principal? a) $898,751 b) $797,929 c) $1,249,172 d) $1,505,360 106.3. A mortgage pool has a principal balance of $1.0 billion and the weighted average coupon (WAC) of the mortgages in the pool is 4.80%. In the first month, the coupon paid by the mortgage pool (i.e., principal plus interest) is $5.247 million. The pass-through security pays a coupon rate of 3.60%. The model's (expected) prepayment assumption is 100% PSA. On the first month, what is the total expected cash flow to the pass-through security? (hint: cash flow to PT security = scheduled principal + prepaid principal + pass-through interest) a) $3.167 million b) $4.414 million c) $5.014 million d) $5.247 million