The Underlying GNMA 15-Year Mortgage Pool Has a Principal Amount

question 42

Multiple Choice

The underlying GNMA 15-year mortgage pool has a principal amount of $50 million and an annual yield of 6 percent (paid monthly) . Assume that there are no prepayments.
-What is the first monthly payment on the Interest Only (IO) strip?

• A)$3,000,000.
• B)$421,928.
• C)$250,000.
• D)$299,775.
• E)$171,928.