QUESTION 8
The weighted average coupon of a bond, which is based on the following mortgages is closest to: Mortgage X: value - $1,900,000, time to maturity - 27 years, interest rate 5.5% Mortgage Y: value - $1,150,000, time to maturity - 25 years, interest rate 5% Mortgage Z: value - $1,850,000, time to maturity - 23 years, interest rate 6%
5.50%
5.57%
6.00%
6.23%
2 points
QUESTION 9
Prior to the secondary mortgage market it was difficult for thrifts to sell mortgages because:
Their mortgage assets were not homogeneous.
Both of these statements.
Potential buyers were concerned with default risk.
None of these statements.