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Consider an MPT created from the following pool of loans: Number of Loans Principal Rate Maturity Group 1 50 $200,000 5% 30 years Group 2

Consider an MPT created from the following pool of loans:

Number of Loans Principal Rate Maturity
Group 1 50 $200,000 5% 30 years
Group 2 100 $100,000 4% 15 years

Which of the following statements is FALSE?

A.

At issuance, WAC of this security is 4.5%

B.

As mortgages in this pool become more seasoned, WAC will go up

C.

At issuance, WAM of this security is 22.5 years

D.

As mortgages in this pool become more seasoned, WAM will go up

E.

At issuance, both groups have equal share in total pool balance

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