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What is the weighted average maturity for this mpt

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Question - A newly issued mortgage pass-through security (MPT) consists of the following three loans:

a $400,000 loan for 40 years at 3.7% APR

a $200,000 loan for 20 years at 3.7% APR

a $200,000 loan for 20 years at 4.6% APR

This pool of mortgages is managed by a trustee who extracts a service fee of .6% of the cash flows.

(a) What is the weighted average maturity for this MPT?

(b) By investing in this MPT, what precisely would an investor be purchasing?

Reference no: EM133128959

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