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QUESTION 1 Consider an MPT that is backed by 100 mortgages with average balance of $350,000 and monthly payment. The MPT has a WAC =

QUESTION 1

Consider an MPT that is backed by 100 mortgages with average balance of $350,000 and monthly payment. The MPT has a WAC = 5% and WAM = 60 months. There is no servicing fee on this security. Assuming the prepayment model of CPR=5% and market rate is 3%, how much should this security sell for?

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