Question: Suppose that 10% coupon pass-throughs are stripped into two classes. Class X-1 receives 80% of the principal and 10% of the interest. Class X-2 receives
Suppose that 10% coupon pass-throughs are stripped into two classes. Class X-1 receives 80% of the principal and 10% of the interest. Class X-2 receives 20% of the principal and 90% of the interest. Answer the below questions. (a) What type of MBS would this be?Explain (b) What is the synthetic coupon rate on Class X-1?show calculation (c) What is the synthetic coupon rate on Class X-2?show calculation
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