Overseas Bank Is Pooling 50 Similar and Fully Amortized Mortgages

question 60

Multiple Choice

Overseas bank is pooling 50 similar and fully amortized mortgages into a pass-through security.The face value of each mortgage is $100,000 paying 180 monthly interest and principal payments at a fixed rate of 9 percent per annum. If the entire mortgage pool is repaid at the end of the second month, what is the weighted average life of the mortgage pool?

• A)2.10 months.
• B)2 months.
• C)1.997 months.
• D)1.95 months.
• E)1.90 months.

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