Consider a CMBS with the following characteristics: Backed by $20M mortgages, 7% interest, 5-yr maturity, 10...

Question

Question

Answer 1

Answer #1

Solution :- Cash flow in Year 1 available to Tranche A = 13 Million * 5 %

= 0.65 Million i.e., $ 650,000. (1 Million = 1000,000, Accordingly, 0.65 Million = $ 650,000)

Conclusion :- Cash flow available for Tranche in the first year = $ 650,000.

Answer 2

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