CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Coupon payments for a $45,000 par value, 9% coupon rate, monthly-pay, mortgage-backed security are ______.

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
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