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Question 9 (Principal-Only MBS and Interest-Only MBS) Referring to the previous question, suppose the risk-free interest rate suddenly changes from 4.5% to 3.5% and that

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Question 9 (Principal-Only MBS and Interest-Only MBS) Referring to the previous question, suppose the risk-free interest rate suddenly changes from 4.5% to 3.5% and that the pre- payment multiplier changes from 100 PSA to 150 PSA. How much money have you made or lost on your investment in the IO MBS

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