Assume that the mortgage is funded by issuing two mortgage$-$backed

securities: Tranche A and Tranche B$.$ Also assume that the principal would

be repaid with a sequential order $($so called waterfall structure$),$ and the

Tranche A has priority in receiving the principal repayment. Tranche A

provided $$3,000$ and Tranche B provided $$7,000.$

What is the value of the Tranche A and Tranche B assuming no prepayment.

$A=3,123\mathrm{.}63$ and $B=7,058\mathrm{.}41$

$A=3,000\mathrm{.}06$ and $B=7,000\mathrm{.}33$

$A=3,023\mathrm{.}48$ and $B=6,076\mathrm{.}52$

$A=3,365\mathrm{.}78$ and $B=7,256\mathrm{.}25$