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FrozenT [24]
3 years ago
10

The following information is for a collateralized mortgage obligation (CMO). Tranche A of $50 million receives quarterly payment

s at 9 percent per year, tranche B of $100 million receives quarterly payments at 10 percent per year, and tranche C of $50 million receives quarterly payments at 11 percent per year.If at the end of the first quarter, the CMO trustee receives total cash flows of $8 million, how are they distributed among the three tranches? (0.2 points)5. What is the principal outstanding on Tranche A, Tranche B, and Tranche C after the end of year payment in the previous question? (0.2 points)
Business
1 answer:
Verdich [7]3 years ago
8 0
<h3>Answer:</h3><h3>Tranche A interest $50m*9%*3/12                          $1,125,000                                                </h3><h3>Tranche B interest $100m*10%*3/12                       $2,500,000                                                        </h3><h3>Tranche C interest $50m*11%*3/12                           $1,375,000</h3><h3>Principal balances:</h3><h3>Tranche  A        $47 million</h3><h3>Tranche B          $100 million</h3><h3>Tranche C           $50 million</h3><h3 /><h3 /><h3>Explanation:</h3><h3>The approach in debts securitization is that the most senior tranche,tranche A in  this question receives any payment  received in excess of periodic payment of interest.</h3><h3>On that basis,the quarterly payments can be shared between the three tranches as follows:</h3><h3>Total quarterly   payment    received                       $8000,000</h3><h3>Tranche A interest $50m*9%*3/12                            ($1,125,000)                                                </h3><h3>Tranche B interest $100m*10%*3/12                       ($2,500,000)                                                        </h3><h3>Tranche C interest $50m*11%*3/12                           ($1,375,000)                                        </h3><h3>Balance left                                                                  $3,000,000</h3><h3>As earlier reiterated, the balance of $3 million would be used to redeem part of tranche A,hence in tranche A is $47 million($50m-$3m):</h3><h3>Principal balances:</h3><h3>Tranche  A        $47 million</h3><h3>Tranche B          $100 million</h3><h3>Tranche C           $50 million</h3>

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Select the situation that will occur when a shortage of bread exists, and consumers pressure producers to change their actions.
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When a market researcher has reported data, statistics, and information that are not consistent with a study's objectives, the r
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$10,000

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3 years ago
Benito's family is thinking of relocating from Los Angeles to Oakland to save money. They set up a budget comparing the cost of
padilas [110]

Answer:

Total monthly saving = $1,315

Explanation:

Given:

                         Oakland     Los Angeles  

Cost Housing       $565        $1200

Food                     $545        $655

Health Care          $245        $495

Taxes                    $450         $625

Other Necessities $350        $495

Find:

Total monthly saving

Computation:

Saving in house = $1200 - $565 = $635

Saving in food = $655 - $545 = $110

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Saving in necessities = $495 - $350 = $145

Total monthly saving = $635+$110+$250+$175+$145

Total monthly saving = $1,315

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3 years ago
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