Please, enter the answers to the following questions, given the information in this question. This is the problem I went over in class. All the following questions consist of calculations to complete the cash flow of tranche A. Please answer this question as true if you understood the question. A CMO is being issued with 3 tranches. The A tranche will consist of $40.5M of principal and have a coupon of 8.25%. The B tranche will have a coupon of 9% and a principal of $22.5M The Z tranche will carry a coupon of 10% with a principal of $45M. The mortgages backing the security issued are FRM at 10% with 10 year maturities and annual payments for simplicity). The issue will be overcollateralized by $4.5M and the issuer (residual) will receive cash flows after payment rules to other classes are satisfied. Priority payments will be made to the A tranche and the A class will be first to receive their promised coupon payment. The B class will receive interest payments only until the A class is repaid. In addition to interest, A will receive priority payments toward principal in the amount of sum of principal repayment by the pool and the interest accrued to Z in that period. After A is repaid. B then will receive priority payments of amortization and accrued interest according the same rules as A. The Z class will accrue interest at 10% until both A and B are repaid. It will receive current interest and principal payments at that time according to the same rules as A and B. All cash flows from the pool that are not designated by the above rules will go to the residual class in that period. Year Beg. Ba Payment Interest Principal End Bal 112,500.00 8,308.86 11,250.00 7,058.86 105,441.14 97,676.40 97,676.40 18,308.86 9,767.64 8,541.22 89,135.18 89,135.18 18,308.86 8,913.52 9,395.3479,739.85 79,739.85 18,308.86 7,973.98 0,334.87 69,404.97 69,404.97 18,308.86 6,940.50 11,368.36 58,036.61 58,036.61 18,308.86 5,803.66 12,505.20 45,531.42 45,531.42 18,308.86 4,553.14 13,755.72 31,775.70 31,775.70 18,308.86 3,177.57 15,131.29 16,644.42 0.00 105,441.14 18,308.86 10,544.11 7,764.74 16,644.42 18,308.86 86 1,664.44 16,644.42 Tranche A Beg. Bal Interest Principal End Bal 40,500 3,341 11,559 28,941 True