Question: Do you expect any changes in mortgage-backed security pricing if the pass-through security was not fully amortised? What is the present value of a twelve

Do you expect any changes in mortgage-backed security pricing if the pass-through security was not fully amortised? What is the present value of a twelve million $ pool of ten-year mortgages with an 8 per cent monthly mortgage coupon per annum if market rates are seven per cent? Assume that the pass-through security is fully amortised. The total mortgage-backed security fee is assumed to be 500 basis points.

Step by Step Solution

★★★★★

3.53 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Yes mortgagebacked security pricing would change if the passthrough security was not fully a... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Banking Questions!

Q:

What is the present value of a $1,500 payment made in nine years when the discount rate is 8 percent?

Q:

What is the present value of a $900 annuity payment over five years if interest rates are 8 percent?

Q:

What is the present value of a $700 annuity payment over six years if interest rates are 10 percent?

Q:

Do you expect any changes in mortgage-backed security pricing if the pass-through security was not fully amortised? What is the present value of a twelve million $ pool of ten-year mortgages with an...

Q:

Do you expect any changes in mortgage-backed security pricing if the pass-through security was not fully amortised? What is the present value of a twelve million $ pool of ten-year mortgages with an...

Q:

Do you expect any changes in mortgage-backed security pricing if the pass-through security was not fully amortised? What is the present value of a twelve million $ pool of ten-year mortgages with an...

Q:

Do you expect any changes in mortgage-backed security pricing if the pass-through security was not fully amortised? What is the present value of a twelve million $ pool of ten-year mortgages with an...

Q:

1.What would be the impact on mortgage-backed security pricing if the pass-through security was not fully amortised? What is the present value of a $10 million pool of 15-year mortgages with an 8.5...

Q:

The Adora and Jorge Tun Case A CASH FLOW AND EDUCATION PLANNING CASE Adora and Jorge were married seven years ago when Jorge was thirty-five years old. He met Adora, who was also thirty-five years of...

Q:

Dear Dr Fids, Can you please help these questions? It is about MBS cash flow. R Generating MBS cash flows can be messy so we are going to write some functions in R that allows us to generate the cash...

Q:

In each case either show that the statement is true or give an example showing that it is false. Throughout, X, Y, Z, X1, X2,..., Xn denote vectors in Rn. (a) If U is a subspace of Rn and X+Y is in...

Q:

Discuss the realization principle and how it is applied in the recognition of revenue. Does the receipt of cash for customers necessarily coincide with the recognition of revenue? Explain.

Q:

Evaluate the integral. - 2 1 ( x - 8 | x | ) d x

Q:

Did Joan have the right to convey the Shelburne farm to a trust that she had established? Does the property belong to the trust or to Mr. Gagnon?

Q:

Cost estimation, cumulative average-time learning curve The Nautilus Company, which is under contract to the U.S. Navy, assembles troop deployment boats. As part of its research program, it completes...

Q:

A truncated solid cone is of circular cross section, and its diameter is related to the axial coordinate by an expression of the form D = ax 3/2 , where a = 1.0 m- 1/2 . The sides are well insulated,...

Q:

According to Chemical Engineering Progress (Nov. 1990), approximately 30% of all pipe work failures in chemical plants are caused by operator error. (a) What is the probability that out of the next...

Q:

Recording Seven Typical Adjusting Entries Dittmans Variety Store is completing the accounting process for the year just ended, December 31, 2011. The transactions during 2011 have been journalized...

Q:

The expected value of the sample means (M) is always equal to: Option A The sample mean (M). Option B The population standard deviation (). Option C The population mean (). Option D The sample size...

Q:

QUESTION, 1) Identify the personnel interviewed in the case study and construct an organizational chart. 2)Based on the interview with Mr. Doit (and any other information you can find in the case...

Q:

Problem 5. ABC bonds are 10-year, 14% coupon bonds and currently have a rating of BBB. You expect big changes for the company over the next year, and you are certain that exactly one year from now...

Q:

BelowisthebodyofarealmemothatatopexecutiveatMicrosoftsenttohisemployeesin...

Q:

BelowisthebodyofarealmemothatatopexecutiveatMicrosoftsenttohisemployeesin...

Q:

Select the best answer to each of the following questions and mark your selection on the edi. 5 points each The variation inherent in the returns of a portfolio depends upon: B. the number of assets...

Q:

Message 2 Instructions: In 2014, Stephen Elop of Microsoft announced the layoffs of 12,500 employees. Read his email to employees (attached on Blackboard) . Then, answer the following questions about...