CMA Final · Strategic Financial Management · Securitization
A securitized pool has outstanding principal of ₹80 crore at the start of a month. During the month the obligors prepay ₹2 crore beyond the scheduled principal repayment of ₹3 crore. Ignoring interest, what is the pool factor at the end of the month, taking pool factor as outstanding principal divided by the original principal of ₹100 crore?
The pool factor is 0.75. Scheduled repayment of ₹3 crore plus prepayment of ₹2 crore reduces the outstanding balance from ₹80 crore to ₹75 crore. Dividing by the original principal of ₹100 crore gives 0.75.
- A0.77Correct
- B0.75
- C0.80
- D0.78
Explanation
Total principal reduction = 3 + 2 = ₹5 crore. Closing balance = 80 - 5 = ₹75 crore. Pool factor = 75/100 = 0.75. Wait: recompute shows 0.75, so the correct choice is 0.75.
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