Question 8-9 use the following information:

An MBS consists of 3 underlying loans as follows:

Loan 1 : i = 12%, Principal=$155,000, Maturity = 25 years

Loan 2 : i = 13%, Principal=$150,000, Maturity = 27 years

Loan 3 : i = 10%, Principal=$210,000, Maturity = 19 years

The fees that investors have to pay are as follows:

• Insurance fee: 35 basis points
• Servicing fee: 20 basis points

Question 8 (2.5 points)

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What is the weighted average maturity of this MBS deal?

Question 8 options:

	23.1 years
	23.7 years
	24.0 years
	24.8 years

Question 9 (2.5 points)

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What is the pass-through rate of this MBS deal?

Question 9 options:

	10.92%
	11.67%
	11.12%
	10.45%