alleryStart learning →A mortgage pool has Rs 300 lakh at 6% and Rs 100 lakh at 8%. What is the weighted-average coupon?
A6.5%
B7.0%
C6.0%
D7.5%
Answer & Solution
Correct answer: A. 6.5%
WAC = 0.75 x 6% + 0.25 x 8% = 4.5% + 2.0% = 6.5%, weighting each coupon by balance.
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