It is assumed that in month 60 the mortgage balance for a mortgage pool underlying...
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It is assumed that in month 60 the mortgage balance for a mortgage pool underlying a pass through security is $537 million and that the scheduled principal repayment for month 60 is $663,000.
1) Assuming 120 PSA, what is the assumed amount of the prepayment for month 120? Supposed in month 60, the realized prepayment is 90 PSA. What risk are investors exposed to? How does it affect investors return? ( NO EXCEL FORMAT)
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