Use the following short rate tree. Short rate can increase or decrease in 6 months by equal probability. Use semi-annual compounding. Time 0 8% 6-month DF: 0.9615 1-year DF: 0.9249 Time 0.5 12% 6-month DF: 0.9434 4% 6-month DF: 0.9804 Now, consider a 1 year mortgage (semi-annually paid) with a mortgage rate of 10% (so that a semi-annual mortgage rate is 5%) and an initial principal balance of $20,000. The mortgage is divided into three sequential pay tranches. Tranche A receives the first $8,000 of the principal, tranche B receives the next $6,000 of the principal, and tranche C receives the remaining $6,000 of the principal. Briefly explain the difference between value-minimizing prepayment policy and deterministic prepayment policy and how you would value the mortgage under value-minimizing prepayment policy.