Question: A CMO has been issued with 3 tranches and a residual. At origination: -Tranche A Investors own 515 million of prindpal with a coupon rate
A CMO has been issued with 3 tranches and a residual. At origination: -Tranche A Investors own 515 million of prindpal with a coupon rate of 3.50%. Tranche B Investors own s1 million of principal with a coupon rate of 3.70%. Tranche Zinvestors own 58 million of principal with a coupon rate of 4.50%. The residual carries 51 million and receives all residual payments. Mortgages backing the security Issued are fully amortizing fixed rate with mortgage rate of 4.50% with 30 year maturities and monthly payments. Assume no serviding/guarantee fee and no prepayments. What is the balance on the tranche at the end of the first month (same as the balance at beginning of the second month)? Round your answers to cents (eg. If your answer is $56000.0444, write 56000,04)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
