Question
Consider a new mortgage pool with the following characteristics: fully amortizing annual payments; maturity = 10 years; fixed intrest rate = 10.00% per year; mortgage
Consider a new mortgage pool with the following characteristics: fully amortizing annual payments; maturity = 10 years; fixed intrest rate = 10.00% per year; mortgage principal = $20 million. The rate of prepayment is expected to be 10% per year. Assuming a yield to maturity of 10.00% per year, what would be the price today of the Interest-only strip for this mortgage pool?
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Basic Finance An Introduction to Financial Institutions, Investments and Management
Authors: Herbert B. Mayo
11th Edition
1285425790, 1285425795, 9781305464988 , 978-1285425795
