Cansider 2 different FN 6 pass-throuphs backed by new 30yr mortgages (360 eqto maturity), with two different groups of underlying borrowers, group X and group Y. We will refer to the pass-through backed by borrower group X as bond X and the pass-through backed by borrower group Y as bond Y : Group X Group Y Assume all other characteristics are the same. I) What is the weighted average coupon (WAC) and weighted average loan size (WAOLS) of group X II) What is the weighted average coupon (WAC) and weighted average lom size (WAOL.5) of group Y? III) Assume FN 6s trade above par and prevailing primary mortquge rates are 5.5% (note rates available to borrowers). Which bood ( X or Y ) would you erpect investors to prefer and why? IV) On the chart below, draw how you expect the s-curves to look on these two borrower groups (hint the important part is how they are positioned shaped relative to each other, be sure to label each one) V) Which bond is leas negatively coacex? How is this related to the shape of the s-curves you drew in part (IV)? Cansider 2 different FN 6 pass-throuphs backed by new 30yr mortgages (360 eqto maturity), with two different groups of underlying borrowers, group X and group Y. We will refer to the pass-through backed by borrower group X as bond X and the pass-through backed by borrower group Y as bond Y : Group X Group Y Assume all other characteristics are the same. I) What is the weighted average coupon (WAC) and weighted average loan size (WAOLS) of group X II) What is the weighted average coupon (WAC) and weighted average lom size (WAOL.5) of group Y? III) Assume FN 6s trade above par and prevailing primary mortquge rates are 5.5% (note rates available to borrowers). Which bood ( X or Y ) would you erpect investors to prefer and why? IV) On the chart below, draw how you expect the s-curves to look on these two borrower groups (hint the important part is how they are positioned shaped relative to each other, be sure to label each one) V) Which bond is leas negatively coacex? How is this related to the shape of the s-curves you drew in part (IV)