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

question 4

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. What is the present value of the mortgage pass-through if, immediately after origination, interest rates increase to 8.25 percent per annum?

• A)$15,000,000.
• B)$14,650,591.
• C)$14,000,000.
• D)$15,115,493.
• E)$15,267,549.

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Definitions:

Ovary

The female reproductive organ in plants and animals where eggs or ovules develop and hormones are produced.

Vulva

The external female genital organs, including the labia majora, labia minora, clitoris, and the openings of the urethra and vagina.

Vagina

The muscular tube leading from the external genitals to the cervix of the uterus in females, part of the female reproductive system.

Fallopian Tube

Part of the female reproductive system, a pair of tubes leading from the ovaries to the uterus, responsible for transporting eggs and the site of fertilization.