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Overseas Bank Is Pooling 50 Similar and Fully Amortized Mortgages

Question 109

Multiple Choice

Overseas bank is pooling 50 similar and fully amortized mortgages into a pass-through security. The face value of each mortgage is $100,000 paying 180 monthly interest and principal payments at a fixed rate of 9 percent per annum.
-If the entire mortgage pool is repaid at the end of the second month, what is the weighted average life of the mortgage pool?


A) 2.10 months.
B) 2 months.
C) 1.997 months.
D) 1.95 months.
E) 1.90 months.

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