QUESTION 8 APO and 10 class of securities is formed backed by a $7,500,000 pool of 10-year FRMs making annual payments with a 10% interest rate. There are no prepayments or serviceriguarantee fee. What is the present value of the PO class if the discount/market rate is 9% ? Excel is recommended for this problem.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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QUESTION 8
APO and 10 class of securities is formed backed by a $7,500,000 pool of 10-year FRMs making annual payments with a 10% interest rate. There are no
prepayments or servicer/guarantee fee. What is the present value of the PO class if the discount/market rate is 9% ? Excel is recommended for this problem.
QUESTION 9
Same setup as above. What is the present value of the 10 class if the discount/market rate is 9% ?
Transcribed Image Text:QUESTION 8 APO and 10 class of securities is formed backed by a $7,500,000 pool of 10-year FRMs making annual payments with a 10% interest rate. There are no prepayments or servicer/guarantee fee. What is the present value of the PO class if the discount/market rate is 9% ? Excel is recommended for this problem. QUESTION 9 Same setup as above. What is the present value of the 10 class if the discount/market rate is 9% ?
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