You are an analyst for a pension fund that invests in mortgage-backed pass-through securities. Given the following cash flows, what should be the total cash flow passed through the pension fund. i.e. the MBS investors, in the first month?

You are an analyst for a pension fund that invests in mortgage-backed pass-through securities. Given the following cash flows, what should be the total cash flow passed through the pension fund. i.e. the MBS investors, in the first month?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 18P

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Question

Total Principal outstanding
8,000,000
Pre-payment rate
150 PSA
Weighted average mortgage rate
8%
Pass-through rate
7.25%
Weighted average remaining maturity
30years (360 months)

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