Question: John Doe is considering adding a CMO to his portfolio. Tranche A has an outstanding balance of $ 1 0 0 . 0 0 0

John Doe is considering adding a CMO to his portfolio. Tranche A has an outstanding balance of $100.000 million and pays $1.0 million in principal in month 10. Research indicates the PSA is 100 and the pass-through rate for tranche A is 7.00%. If all of the principal is paid to tranche A and the outstanding balance on the CMO is $300 million what is the cash flow to tranche A in months 10 and 11?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock 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 Finance Questions!