Number 16 is original qurstion. yu just have to answer 18 and 19 please

QUESTION 18 What would be the value of all PO strips if the expected prepayment rate in year 1 was 40%? QUESTION 16 BOA originates 10 Fully Amortizing Fixed Rate non-recourse Mortgages, cach has a $100 balance, 20% interest rate (no fees), 2-year term, and ammual payments. BOA immediately issues 10 and PO strips backed by the pool of these mortgages and sells them to investors who discount payoffs at 10% What profits does BOA make immediately? 136 864 540 654.55 89 QUESTION 19 What would be the value of all PO strips if instead the expected default rate in your I was 40% (and no defaules in your 217 Asume that in case of default BOA recovers 70% of balance, QUESTION 18 What would be the value of all PO strips if the expected prepayment rate in year 1 was 40%? QUESTION 16 BOA originates 10 Fully Amortizing Fixed Rate non-recourse Mortgages, cach has a $100 balance, 20% interest rate (no fees), 2-year term, and ammual payments. BOA immediately issues 10 and PO strips backed by the pool of these mortgages and sells them to investors who discount payoffs at 10% What profits does BOA make immediately? 136 864 540 654.55 89 QUESTION 19 What would be the value of all PO strips if instead the expected default rate in your I was 40% (and no defaules in your 217 Asume that in case of default BOA recovers 70% of balance