Question

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A $500 million RMBS pool was issued on 12/01/2019. By October 1, 2020, you would expect...

A $500 million RMBS pool was issued on 12/01/2019. By October 1, 2020, you would expect the pool factor to be

A. Greater than 1.0

B. Less than 1.0

C. equal to 1.0

Solutions

Expert Solution

The correct answer is less than 1.0

The Pool factor is calculated by dividing outstanding principal balance by original principal, So after 1 year, the payment will be made which will reduce the principal balance thus the resulting ratio of factor would be less than 1.0.

jeff jeffy answered 2 years ago
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