1. Stratify the following Agency mortgages at a deal coupon of 4%. What are the initial pool, pass-through, and PO principal amounts, and what are the initial notional principal and coupon of the IO? (Gross): 4.10%, 4.20%, 4.30%, 4.40% (Net): 3.852%, 3.934%, 4.071%, 4.153% (Balance (mln $): 50.343, 101.435, 123.777, 40.123 (respectively)
2. Which of the following are indirect costs of issuing securities? I. abnormal returns II. underwriters' spread III. underpricing IV. legal fees