Assume That a Mortgage Pool Follows a Specified PSA Prepayment

Assume that a mortgage pool follows a specified PSA prepayment schedule. Given this, the cash flow yield on the mortgage pool will do which one of the following?

A) equal the average interest rate of the mortgages contained in the pool
B) equal the anticipated cash flow for the next year divided by the current value of the pool
C) equate the present value of the future cash flows from the pool to the current value of the pool
D) equate the average interest rate on the mortgages to the current market rate of interest
E) equal the current market rate of interest

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