Answer all multiple-choice questions by clearly marking your answer. Assume all bonds are semi-annual pay, have...
Answer all multiple-choice questions by clearly marking your answer. Assume all bonds are semi-annual pay, have whole years to maturity, and have face (or principal values) of $1000.
Home mortgages are amortizing loans. This means that:
a. Mortgages don’t include interest payments, as they are designed to solely pay down principal.
b. Mortgages include only interest payments, as they are designed to solely pay down interest expense and not principal.
c. Mortgage payments are usually variable, and incorporate changing amounts of principal and interest.
d. Mortgage payments are usually fixed, and incorporate changing amounts of principal and interest.
Homework Answers
An amortizing mortgage is a fixed-term loan on which you make a series of roughly equal payments. Your lender arranges the payments so that the entire loan is paid off at the end of the mortgage term. A portion of each payment goes towards both the principal and the interest. Initially, the bulk of your payment goes towards the interest. As you near the end of the loan term, most or all of your payment goes towards the principal,
Hence the answer is:
d. Mortgage payments are usually fixed, and incorporate changing amounts of principal and interest.
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Answer all multiple-choice questions by clearly marking your
answer. Assume all bonds are semi-annual pay, have...
The next three questions refer to the following data. Assume all bonds make semi-annual coupon payments...
The next three questions refer to the following data. Assume all bonds make semi-annual coupon payments and have face values of $1,000. Time to maturity Coupon rate Price 3.00% 3.50% 3.25% 4.00% 3.50% $978.36 $975.49 $970.74 $1,003.67 $995.46 The modified duration of the 4-year bond is approximately (a) 3.736 (b) 3.775 (c) 3.595 (d) 3.632
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Assume that you have a 30 year fully-amortized fixed rate mortgage for your home. Your loan...
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Real Estate Finance
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Please write your answer clearly,especially the last question. Consider two bonds, each pays semi-annual coupons and...
Please write your answer clearly,especially the last
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Consider two bonds, each pays semi-annual coupons and 5 years left until maturity. One has a coupon rate of 5% and the other has a coupon rate of 10%, but both currently have a yield to maturity of 8%. How much will the price of each bond change if its yield to maturity decreases from 8% to 7%? A 10-year, 10% semiannual coupon bond selling for $1, 135.90 can be called in...
Please answer ALL, Thank you ! 1. Ivanhoe Inc. has seven-year bonds outstanding that pay a...
Please answer ALL, Thank you ! 1. Ivanhoe Inc. has seven-year bonds outstanding that pay a 11 percent coupon rate. Investors buying these bonds today can expect to earn a yield to maturity of 6.950 percent. What is the current value of these bonds? Assume annual coupon payments -Current Value: 2. Barbara Jones is looking to invest in a three-year bond that makes semi-annual coupon payments at a rate of 5.375 percent. If these bonds have a market price of...
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An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 9% annual coupon. Bond L matures i...
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The next three questions refer to the following data. Assume all bonds make semi-annual coupon payments and have face values of $1,000. Time to maturity Coupon rate Price 3.00% 3.50% 3.25% 4.00% 3.50% $978.36 $975.49 $970.74 $1,003.67 $995.46 The modified duration of the 4-year bond is approximately (a) 3.736 (b) 3.775 (c) 3.595 (d) 3.632
5a FYI bonds have a par value of $1,000. The bonds pay an 8% annual coupon and will mature in 11 years. i) Calculate the price if the yield to maturity on the bonds is 7%, 8% and 9%, respectively. ii) What is the current yield on these bonds if the YTM on the bonds is 7%, 8% and 9%, respectively. Hint, you can only calculate current yield after you have determined the intrinsic value (price) of the bonds. iii)...
Real Estate Finance
answer all please
. John Corbitt takes a fully amortizing mortgage for $80,000 at 10 percent interest for 30 years, monthly payments. What will be his monthly payment? 2. Dave Burns wants to buy a house. To do so, he must incur a mortgage. A local lender has determined that Dave can afford a monthly payment of $600, principal and interest. If the current interest rate on 30-yearm fixed-rate mortgage is 9.50 percent, what is the maximum...
Please write your answer clearly,especially the last
question.
Consider two bonds, each pays semi-annual coupons and 5 years left until maturity. One has a coupon rate of 5% and the other has a coupon rate of 10%, but both currently have a yield to maturity of 8%. How much will the price of each bond change if its yield to maturity decreases from 8% to 7%? A 10-year, 10% semiannual coupon bond selling for $1, 135.90 can be called in...
Assume today is November 1, 2019 and that all bonds pay interest annually with a face value of $1,000. YIM - Current yield + Capital Gains yield; CY - Annual Interest/Current Price GE is A rated; AA Treasures yield 3-year is 1.90%, 10-year 2.10% 5 Years ago GE issued 6% coupon paying bonds with a face value set to mature on November 1, 2029. Growth concems have forced monetary authorities throughout the world to lower interest rates during the past...
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