- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 1. Fixed-Income Instrument Features
- Subject 1. Basic Features of a Fixed-Income Security
CFA Practice Question
Coupon payments for a $45,000 par value, 9% coupon rate, monthly-pay, mortgage-backed security are ______.
B. $1,012.50
C. $4,050
A. $337.50
B. $1,012.50
C. $4,050
Correct Answer: A
With monthly coupon payments, the 9% annual coupon rate is divided by 12 in order to determine the monthly coupon rate. The monthly coupon rate is then multiplied by the par value to determine the coupon payment.
User Contributed Comments 4
| User | Comment |
|---|---|
| woori | calculate monthly payment |
| popolistic | Annual Payment = (0.09*$45,000) = $4,050 Monthly Payment = $4,050 / 12months =$337.50 |
| Luminos | To calculate the monthly interest payment .09/12 =.0075. .0075*45,000 = 337.50 |
| 2014 | Coupon payments to MBS & ASB are monthly |