Calculate how much money each Tranche will receive/TUTORIALOUTLET DOT COM - PowerPoint PPT Presentation

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Calculate how much money each Tranche will receive/TUTORIALOUTLET DOT COM

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You have been assigned to calculate how much money each Tranche will receive. There are 10 mortgages in a pool. Each mortgage has a value of $10,000,000 for a total pool of $100,000,000. Each mortgage is an interest only mortgage paying a 6% interest rate. Half of the mortgages will mature this year and half of them will mature next year. – PowerPoint PPT presentation

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Title: Calculate how much money each Tranche will receive/TUTORIALOUTLET DOT COM


1
Calculate how much money each Tranche will
receive/TUTORIALOUTLET DOT COM
2
Calculate how much money each Tranche will
receive/TUTORIALOUTLET DOT COM
  • Calculate how much money each Tranche will
    receive
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  • You have been assigned to calculate how much
    money each Tranche will receive.  There are 10
    mortgages in a pool.  Each mortgage has a value
    of 10,000,000 for a total pool of 100,000,000. 
    Each mortgage is an interest only mortgage paying
    a 6 interest rate.  Half of the mortgages will
    mature this year and half of them will mature
    next year.  An A Tranche has been established
    with a par of 75,000,000 and a coupon of 4.  A
    B Tranche has been established with a par of
    25,000,000 and a coupon of 6.  Finally, an
    Interest Only Tranche has also been established. 
    3 mortgages default after the first year. 
    Investors will only recover half of the value of
    each of these 3 mortgages.

3
Calculate how much money each Tranche will
receive/TUTORIALOUTLET DOT COM
THANK YOU
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