If a Mortgage Pool Consists of Five 10% FRMs Totaling

question 5

Multiple Choice

If a mortgage pool consists of five 10% FRMs totaling $500,000,five 9% FRMs totaling $450,000,and ten 8% FRMs totaling $750,000,what is the weighted average coupon (WAC) rate?

• A)8.75%
• B)8.85%
• C)9.00%
• D)None of the above

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Definitions:

Conversion Risk

The uncertainty associated with changing one form of currency to another, which may result in financial loss due to fluctuating exchange rates.

Behavioral Feasibility

Assesses whether the people and organizational culture will adapt to changes required by a proposed system or project.

Human Issues

Concerns or problems related to human factors, such as ergonomics, human error, and workforce management.

Systems Development

The process of creating and implementing a new system, including both software and hardware components, to meet specific business or user requirements.