What numbers are true about the SDA default model:

1.Under the 100% SDA assumption no one defaults when their mortgage is a few months away from being paid out

2.If you know the beginning pool balance and assume a 200% SDA, you can figure out what the CDR is for each month

3.SDAfunction for defaults takes the same shape as a PSA function for prepayments

4.SDA stands for Standard Default Assumption

5.If you know the beginning pool balance and assume a 200% SDA, you can figure out what the CDX is for each month

6.The SDA takes into account maturity of the mortgage

Mark all the true statements about CMOs:

1.CMOsare a subset of MBS

2.CMO can have several classes (tranches) of securities backed by the same pool of mortgages

3.In a sequential pay CMO with an A,B and Z tranche, all tranches get their interest payments in the first month except for Z-bonds

4.In a sequential pay CMO, the tranche that gets paid last assumes the least default risk

5.In a sequential pay CMO, the tranche that gets paid off first is protected against con- traction risk