What is the present value of a $15 million pool of 30-year mortgages with an 10.5...

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What is the present value of a $15 million pool of 30-yearmortgages with an 10.5 percent per year monthly mortgage coupon ifmarket rates are 7 percent? The GNMA guarantee fee is 7 basispoints and the FI servicing fee is 43 basis points.

a. Assume that the GNMA pass-through is fullyamortized.
b. Assume that the GNMA pass-through is only halfamortized. Market rates are still 7 percent. If there is a lump sumpayment at the maturity of the GNMA pass-through that equals 60percent of the mortgage pool's face value, find the present valueof the pass-through.
PLEASE PROVIDE EXCEL FORMULA SPELLED OUT TO ANSWER THESEPROBLEMS. SPECIFICALLY QUESTION B. I'm having trouble understandinghow to get the answer properly I understand how to get answerA.

Answer & Explanation Solved by verified expert

3.9 Ratings (764 Votes)

formula for PV of annuityP 15 millionn 1230 360i The GNMA monthly coupon rate 105 007 043 105 05 10 PA 1012 08333 0083R monthly payments a Assuming GNMA is fully amortizedCalculating See Answer

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What is the present value of a $15 million pool of 30-yearmortgages with an 10.5 percent per year monthly mortgage coupon ifmarket rates are 7 percent? The GNMA guarantee fee is 7 basispoints and the FI servicing fee is 43 basis points.a. Assume that the GNMA pass-through is fullyamortized.b. Assume that the GNMA pass-through is only halfamortized. Market rates are still 7 percent. If there is a lump sumpayment at the maturity of the GNMA pass-through that equals 60percent of the mortgage pool's face value, find the present valueof the pass-through.PLEASE PROVIDE EXCEL FORMULA SPELLED OUT TO ANSWER THESEPROBLEMS. SPECIFICALLY QUESTION B. I'm having trouble understandinghow to get the answer properly I understand how to get answerA.