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Consider a mortgage pool that consists of 10 mortgages. Each mortgage carries an interest rate (note rate) of 10%, 10 years to maturity, principal of
Consider a mortgage pool that consists of 10 mortgages. Each mortgage carries an interest rate (note rate) of 10%, 10 years to maturity, principal of $1,000, and pays interest annually. Assume one mortgage per year prepays in the pool.
If the interest rate (discount rate) is flat at 12%.
What is the value of the mortgage pool?
Round your answer to a dollar unit. e.g. if your answer is 8932.94, write down 8933.
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