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Question
One hundred identical mortgages are pooled together into a pass-through security. Each mortgage has a $150,000 principal, a fixed annual interest rate of 8 percent (paid monthly), and is fully amortized over a term of 30 years.
What is the present value of the mortgage pass-through if, immediately after origination, interest rates increase to 8.25 percent per annum?
A. $15,000,000.
B. $14,650,591.
C. $14,000,000.
D. $15,115,493.
E. $15,267,549.
Answer
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