Please answer all the questions using EXCEL only and show the formulas used to solve the question BOA originates 10 Fully Amortizing Fixed Rate non recourse Mortgages, each has a $101 balance, 20 interest rate (no fees), 2 year term, and annual payments BOA immediately issues IO and PO strips backed by the pool of these mortgages and sells them to investors who discount payoffs at 10 What is the value of the mortgage pool, according to investors What profits does BOA make immediately What is the value of all PO strips What is the value of all IO strips For the next three questions, assume the expected prepayment rate in year 1 is 40 What would be the value of all PO strips What would be the value of all IO strips What would be the BOAs profits For the next three questions, assume that instead of expected prepayment, there is an expected default rate in year 1 was 40 (and no defaults in year 2) Assume that in case of default, BOA recovers 70 of the balance What would be the value of all PO strips What would be the value of all IO strips What would be the BOAs profits

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Please answer all the questions using EXCEL only and show the formulas used to solve the question. BOA originates 10 Fully Amortizing Fixed Rate non-recourse

Please answer all the questions using EXCEL only and show the formulas used to solve the question.

BOA originates 10 Fully Amortizing Fixed Rate non-recourse Mortgages, each has a $101 balance, 20% interest rate (no fees), 2-year term, and annual payments. BOA immediately issues IO and PO strips backed by the pool of these mortgages and sells them to investors who discount payoffs at 10%.

What is the value of the mortgage pool, according to investors?
What profits does BOA make immediately?
What is the value of all PO strips?
What is the value of all IO strips?

For the next three questions, assume the expected prepayment rate in year 1 is 40%?

What would be the value of all PO strips?
What would be the value of all IO strips?
What would be the BOAs profits?

For the next three questions, assume that instead of expected prepayment, there is an expected default rate in year 1 was 40% (and no defaults in year 2)? Assume that in case of default, BOA recovers 70% of the balance.