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Consider a CMO with an IO and PO tranche backed by a pool of mortgages with the following characteristics: FRM with 3.5% interest issued for

Consider a CMO with an IO and PO tranche backed by a pool of mortgages with the following characteristics:

FRM with 3.5% interest issued for 15 years with monthly payment prepayment rate 5% CPR no servicing / guarantee fee

At the beginning of the third year, the principal outstanding on the mortgages is $4,046,179.41.

You will need to use the following formula (dont forget to keep 8 decimal points): SMM =1(1CPR)1/12

A. How much did the IO tranche investors receive in month 25?

B. What was the prepayment amount in month 25?

C. What was the scheduled principal amount paid to the issuer in month 25?

D. How much were the investers in the PO strip paid in month 25?

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