If the bank uses a securitized bond financing, what is the amount of promised repayment to the securitized bondholders?
A)$29.87
B)$31.22
C)$38.77
D)$45.63
E)$48.79

Question

Quizplus · Accepted Answer

The promised repayment to the securitized bondholders is the present value of the future cash flows from the underlying assets. In this case, the underlying assets are the mortgages. The present value of the future cash flows is $29.87 million.

If the Bank Uses a Securitized Bond Financing, What Is