A CMO has been issued with 3 tranches and a residual (the residual owns no principal at origination). At origination: - Tranche A investors own $55,000,000 of principal with a coupon rate of 3.50%. - Tranche B investors own $8,000,000 of principal with a coupon rate of 3.70%. - Tranche Z investors own $11,000,000 of principal with a coupon rate of 4.50%. The residual carries no principal and receives remaining payments. At origination, the mortgages backing the security issued are FRM with mortgage rate of 4.50% with 30 year maturities and MONTHLY payments. Assume no servicing/guarantee fee and no prepayments. Remember to adjust rates to monthly if necessary. Round your answers to cents. a) What is the mortgage pool's starting balance at origination?
A CMO has been issued with 3 tranches and a residual (the residual owns no principal at origination). At origination:
- Tranche A investors own $55,000,000 of principal with a coupon rate of 3.50%.
- Tranche B investors own $8,000,000 of principal with a coupon rate of 3.70%.
- Tranche Z investors own $11,000,000 of principal with a coupon rate of 4.50%.
The residual carries no principal and receives remaining payments. At origination, the mortgages backing the security issued are FRM with mortgage rate of 4.50% with 30 year maturities and MONTHLY payments. Assume no servicing/guarantee fee and no prepayments. Remember to adjust rates to monthly if necessary. Round your answers to cents.
a) What is the mortgage pool's starting balance at origination?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
