A MPT is being issued backed by a mortgage pool that consists of 100 mortgages with an average balance of 150,000. Mortgages are 10 year FRMs with annual payments. The mortgage rate in all of them is 5%. Assume that there is no prepayment and no servicer/guarantee fee in the projected cashflows of the mortgage pool. If the investor has a 2% discount rate, what will be their valuation of the MPT at origination be compared to the pool's par value at origination ($15,000,000) ?
a. Cannot be determined with the information given
b. Higher
c. Equal
d. Lower
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