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please Consider a senuential pay CMO that is backed by 60 mortgages with average balance of $100,000 each. The mortgages have monthly payments with WAM
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Consider a senuential pay CMO that is backed by 60 mortgages with average balance of $100,000 each. The mortgages have monthly payments with WAM =12 yage 3 and WAC =4%. There is a servicing fee of 0.6% and prepayment is according to 100% PSA. There are three tranches in this CMO: tranch A issued for $2,000,000, tranche B issued for $2,000,000, and a Z-bond issued for $2,000,000. How much cash flow do investors in tranche A receive in the first month? QUESTION 8 Consider the same CMO as in the previous question and suppose that in month 10 , the beginning balance on tranche A is $1,682,409.07, the beginning balance on tranche B is $2,000,000.00 and the beginning balance on Z is $2,051,581.84. How much cash flow do investors in tranche A receive in month 10Step by Step Solution
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