Assume that the mortgage is funded by issuing two mortgage-backed securities: Tranche A and Tranche B. Also assume that the principal would be repaid with a sequential order (so called waterfall structure), and the Tranche A has priority in receiving the principal repayment. Tranche A provided $3,000 and Tranche B provided $7,000. What is the value of the Tranche A and Tranche B assuming no prepayment. A = 3,123.63 and B = 7,058.41 A 3,000.06 and B = 7,000.33 A 3,023.48 and B = 6,076.52 A = 3,365.78 and B = 7,256.25
Assume that the mortgage is funded by issuing two mortgage-backed securities: Tranche A and Tranche B. Also assume that the principal would be repaid with a sequential order (so called waterfall structure), and the Tranche A has priority in receiving the principal repayment. Tranche A provided $3,000 and Tranche B provided $7,000. What is the value of the Tranche A and Tranche B assuming no prepayment. A = 3,123.63 and B = 7,058.41 A 3,000.06 and B = 7,000.33 A 3,023.48 and B = 6,076.52 A = 3,365.78 and B = 7,256.25
Chapter9: Obtaining Affordable Housing
Section9.4: Financing A Home
Problem 1CC
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Bhuptbhai
Transcribed Image Text:Assume that the mortgage is funded by issuing two mortgage-backed
securities: Tranche A and Tranche B. Also assume that the principal would
be repaid with a sequential order (so called waterfall structure), and the
Tranche A has priority in receiving the principal repayment. Tranche A
provided $3,000 and Tranche B provided $7,000.
What is the value of the Tranche A and Tranche B assuming no prepayment.
A = 3,123.63 and B = 7,058.41
A 3,000.06 and B = 7,000.33
A 3,023.48 and B = 6,076.52
A = 3,365.78 and B = 7,256.25
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