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Assume that the losses/defaults in the previous question occur in month 12, with no other defaults in the pool. Assume the scheduled and unscheduled principal
Assume that the losses/defaults in the previous question occur in month 12, with no other defaults in the pool. Assume the scheduled and unscheduled principal payments are the same as in September 2008 and all remaining loans prepay at the end of 12 months. What is the IRR for an investment in the M2 and M6 bonds
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