Question 2 Create a schedule of predicted cash flow for the following pass-through. Mortgage pool: $5 million All mortgages are FRM at 10% per year, 5-year maturity, yearly payment Pass-through: $5 million, yearly payment Fee payment: 0.5% of outstanding balance Assume prepayment rate: 0.5% of the mortgage pool for the 1" year, 1% for the 2nd year, and 1.25% for the remaining years What is the value of this pass-through if the current interest rate (discount rate) is 8%? Year Beginning Mortgage Interest Principal Pre- Fee Payment to Ending balance payment payment payment payment payment investors balance 1 2 3 14 5