Suppose That an Investor Owns a Pass-Through in Which the Remaining

question 14

Multiple Choice

Suppose that an investor owns a pass-through in which the remaining mortgage balance at the beginning of a month is $200 million. Assuming that the CPR is 4.00% and the scheduled principal payment is $2.5 million, what is the estimated prepayment for this month?

• A) $670,681
• B) $670,701
• C) $670,721
• D) $670,741

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Definitions:

Current Liabilities

Obligations or debts a company expects to settle within one fiscal year or its operating cycle, whichever is longer.

Profit Margin

A financial ratio evaluating a company's profitability, calculated by dividing net income by sales revenue.

Pro Forma

Financial statements or projections based on hypothetical scenarios or assumptions.

Retained Earnings

The cumulative amount of earnings or profit of a firm after dividend payments, which is reinvested in its business.