Describes the price of this security

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Reference no: EM13880682

A MPT is issued on a pool of mortgages that carry an 11% interest rate. The coupon rate offered to investors is 10.5% and the servicing fee is 0.5%. If market interest rates are at 10.5% which of the following describes the price of this security?

1. Will sell at par.

2. Will sell at a discount.

3. Will sell at a premium.

4. Cannot be determined from information provided.

Reference no: EM13880682

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