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e. What are the residual cash flows to MZ? What rate of return will be earned on the equity overcollateralization? f.Optional. Assume that the
e. What are the residual cash flows to MZ? What rate of return will be earned on the equity overcollateralization? f.Optional. Assume that the mortgages in the underlying pool prepay at the rate of 10 percent per year. How will your answers in (b)-(e) change? g. Optional. Assume that immediately after the securities are issued in case (f), the price of all securities suddenly trades up by 10 percent over the issue price. What will the yield to maturity be for each security?
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