- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 45. Introduction to Asset-Backed Securities
- Subject 4. Mortgage Pass-Through Securities
CFA Practice Question
Consider the following mortgage pool information:
SMM: 0.006
Scheduled monthly repayment: $20,000
Balance: $1,000,000
SMM: 0.006
Scheduled monthly repayment: $20,000
The forecasted prepayment amount for the next month is:
Correct Answer: $5,880
Prepayment = 0.006 x ($1,000,000 - $20,000) = $5,880
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