Suppose the initial value of a pool of mortgages with a contract rate of 4% (compounded monthly) and maturity of 15 years is $100 million. The pool is divided into five sequential-pay tranches( A,B,C,D,E) each with a par value of $20 million. 

1. For the first month determine the total payment generated by the $100 million pool of mortgages, total interest, and total principal payment. Assume no prepayments the first month. What is the scheduled payment (in millions of dollars four decimal places)? 

2. What is the interest payment (in millions of dollars 

3. What is the scheduled principal payment (in millions of dollars -- four decimal places)? 

4. For the first month determine the cash flow to each CMO tranche. Assume no prepayments the first month What is the cash flow to the A tranche (millions of dollars four decimal places)? 

5. What is the cash flow to the tranche of dollars four decimal places)?

Answer rating: 100% (QA)

1 An amortization time table is a entire desk of periodic mortgage bills displaying the quantity of main and the quantity of hobby that include every fee till the mortgage is paid off on the cease of ... View the full answer