Assuming the mortgages are interest only

Assignment Help Financial Management
Reference no: EM131349099

New England National Bank pools $30,000,000 in mortgage principal that pays an aggregate coupon of 4.1% per annum. a) Assuming the mortgages are interest only, how much principal will remain in the pool at the end of month 8 assuming 421% PSA (all payments are made in arrears).

Reference no: EM131349099

Questions Cloud

Possibly reduce its economic exposure to exchange rate risk : Kerr, Inc., a major U.S. exporter of products to Japan, denominates its exports in dollars and has no other international business. It can borrow dollars at 9 percent to finance its operations or borrow yen at 3 percent. If it borrows yen, it will be..
What is role of factor in international trade transactions : Describe the role of the Overseas Private Investment Corporation (OPIC). What are bills of lading, and how do they facilitate international trade transactions? What is forfaiting? Specify the type of traded goods for which forfaiting is applied. What..
The correlation between the two assets : You are going to invest in Asset J and Asset S. Asset J has an expected return of 11.4 percent and a standard deviation of 52.4 percent. Asset S has an expected return of 8.4 percent and a standard deviation of 17.4 percent. The correlation between t..
Find the payment to bondholders after one year has passed : Ingenta Bank has securitized a pool of 500 interest only mortgages with and average principal of 450,000 each and 30 years to maturity. The mortgage pool pays an aggregate coupon of 3.42%. Ingenta bank sells the pool to an SPV who collects an annual ..
Assuming the mortgages are interest only : New England National Bank pools $30,000,000 in mortgage principal that pays an aggregate coupon of 4.1% per annum. Assuming the mortgages are interest only, how much principal will remain in the pool at the end of month 8 assuming 421% PSA.
Both bonds make annual payments and have yield to maturity : "A" bond is a premium bond with 8% coupon. Houston bond is a 4 % coupon bond currently selling at a discount. Both bonds make annual payments and have a yield to maturity (YTM) of 6%, and have 5 years till maturity.
Firm is considering a project that has initial investment : A firm is considering a project that has an initial investment of $140,000 and is expected to produce cash inflows of $26,250 per year for 10 years. The firm’s cost of capital is 10.3%. What is the project’s IRR? Based on this, should the project be ..
Using the mutual fund theorem or separation theorem : You are the financial adviser to three individuals, a Young person with high risk tolerance, a Middle aged person with medium risk tolerance and an old person with low risk tolerance. Here are the current conditions: Risk free asset is earning 12 % p..
What should be the intrinsic value : Sugar Land Co. is a fast growing firm and no dividend will be paid on the stock over the next 9 years. The company then will pay a $12 dividend per share in year 10 and will increase the dividend by 5 percent forever. If the required rate of return f..

Reviews

Write a Review

Financial Management Questions & Answers

  Stock expects the future free cash flows

You are working on the valuation for an upcoming IPO. The company that wants to sell its stock expects the following future free cash flows (FCF, in millions of dollars): -7 in year 1, 8 in year 2, 19 in year 3, and cash flows are expected to grow st..

  Company expects to pay annual dividends-required return

New Gadgets is growing at a very fast pace. As a result, the company expects to pay annual dividends of $0.55, 0.80, and $1.10 per share over the next three years, respectively. After that, the dividend is projected to increase by 5 percent annually...

  Regarding a growing annuity problem

Assume the following regarding a growing annuity problem: Your salary at the end of the last year that you work is $90,000. You would like your income stream to begin at the end of your first year of retirement with a payment equal to 70% of your las..

  What price will the bond sell

A ten year bond having a face value of $10,000 and coupon interest rate of 5.0% is priced to yield 6.5%. Interest is paid annually. At what price will the bond sell?

  What will be the value of equity after the restructuring

Consider an unlevered firm with EBIT of $6 million and 1 million shares of common equity outstanding. The required rate of return on the firm’s assets is 10%. The firm has a corporate tax rate of 40%. The firm is considering issuing $18 million in de..

  What is the major purpose of depreciation

What is the major purpose of depreciation, and describe at least two ways in which assets can be depreciated. If the ABC Medical group purchased a machine that cost $28,000 and had an estimated useful life of 7 years and an estimated salvage value of..

  What is the weighted-average cost of capital for firm

What is the weighted-average cost of capital for a firm with the following sources of funds and corresponding required rates of return: $5 million common stock at 16%, $500,000 preferred stock at 10%, and $3 million debt at 9%. All amounts are listed..

  Is there a friday effect on the daily simple returns

Is there a Friday effect on the daily simple returns of S&P composite index?  -Estimate the model and test the hypothesis that there is no Friday effect. Draw your conclusion.

  Current ratio can be obtained solely from the balance sheet

Current ratio can be obtained solely from the balance sheet. Total profit margin, or just called total margin, can be obtained solely from the income statement. Average collection period is used to evaluate account receivable performance. A smaller n..

  The yen exchange rates in the two different markets

Assume a New York bank is quoting a spot rate for the Japanese yen at JY135/$. Also assume that a bank in London is quoting a spot rate for yen of $.008100/JY. If you had $1,000,000, how could you set up a buy – sell transaction to take advantage of ..

  Selection of source of short-term financing

Selection of a source of short-term financing should include all of the following EXCEPT:

  What is the bond current yield

What is the rate of return for an investor who pays $ 1,061.84 for a three-year bond with a 10 % coupon and sells the bond one year later for $ 1,010.08? If a bond with a face value of $1,000 and a coupon rate of 8 percent is selling for $970, is the..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd