One Hundred Identical Mortgages Are Pooled Together into a Pass-Through

question 107

Multiple Choice

One hundred identical mortgages are pooled together into a pass-through security.Each mortgage has a $150,000 principal, a fixed annual interest rate of 8 percent (paid monthly) , and is fully amortized over a term of 30 years. For the first monthly payment, what portion is principal and what portion is interest?

• A)$100,000 principal and $10,065 interest.
• B)$12,000 interest and no principal.
• C)$100,000 interest and no principal.
• D)$100,000 interest and $10,065 principal.
• E)$10,000 interest and $2,000 principal.

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Definitions:

HMOs

Health Maintenance Organizations, a type of health insurance plan that provides healthcare services to members through a network of doctors, hospitals, and other healthcare providers.

PPOs

Preferred Provider Organizations, a type of health insurance plan that offers a network of healthcare providers you can use for your medical care.

Traditional Health Care

Healthcare practices based on historical and cultural traditions, often contrasting with contemporary Western medicine.

Flexible Benefit Plans

An employee benefits program that allows employees to choose from a variety of pre-tax benefits to construct a benefits package that best meets their needs.