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Question 1: The Green Mortgage Company has originated a pool containing 75 ten-year fixed rate mortgages with an average balance of $100,000 each. All mortgages
Question 1: The Green Mortgage Company has originated a pool containing 75 ten-year fixed rate mortgages with an average balance of $100,000 each. All mortgages in the pool carry a coupon of 12 percent. Assume mortgage payments are made annually at 12%. The market interest rate is 7 percent. Green would now like to sell the pool to FNMA. What is the pool factor in five years?
Question 2: What will be the price that Green should obtain on the date of issuance ?
Question 3: Instead of selling the pool of mortgages, Green decides to securitize the mortgages by issuing 200 pass-through securities. The quoted coupon rate for the MPT will be 11.5 percent. What will each investor pay for the MPT security?
The Green Mortgage Company has originated a pool containing 75 ten-year fixed rate mortgages with an average balance of $100,000 each. All mortgages in the pool carry a coupon of 12 percent. Assume mortgage payments are made annually at 12%. The market interest rate is 7 percent. Green would now like to sell the pool to FNMA. What is the pool factor in five years? Question 2 0.01pts What will be the price that Green should obtain on the date of issuance? Question 3 0.02pts Instead of selling the pool of mortgages, Green decides to securitize the mortgages by issuing 200 pass-through securities. The quoted coupon rate for the MPT will be 11.5 percent. What will each investor pay for the MPT securityStep by Step Solution
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