Calculate the nominal amount

Assignment Help Financial Management
Reference no: EM131508021

The following CMO structure has 10% backed collateral

Tranche  Par amount (millions)    Coupon rate (%)

              A                      400                            7.5

              B                      300                            6.5

              C                      200                           7.25

If the client wants the notional IO with a coupon rate of 7%   

Calculate the nominal amount.

Show calculations and formula please

Reference no: EM131508021

Questions Cloud

Economic conditions will strengthen and government spending : If you expect economic conditions will strengthen and government spending will increase.
What is the banks cost of preferred stock : Sixth Fourth Bank has an issue of preferred stock with a $7.40 stated dividend that just sold for $79 per share. What is the bank’s cost of preferred stock?
What are the different alternative methodologies : What are the different alternative methodologies that can be applied to meet this challenge?
Using market comparables and multiples : How can we revise the FCF model by using market comparables and multiples to make it hit corporate targets we might have?
Calculate the nominal amount : Calculate the nominal amount
What is the portfolio weight of stock : What is the portfolio weight of Stock A? What is the portfolio weight of Stock B?
What is the expected return on portfolio : what is the expected return on the portfolio?
What is the wacc for this expansion project : What is the wacc for this expansion project if Mirha expects to maintain its target capital structure?
How expansionary activities conducted by federal reserve : Describe how expansionary activities conducted by the Federal Reserve (FED) impact the money supply, credit availability, IRs, and security prices.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the most you will pay for this stock

A new app wants to attract investors. It will be issuing stock that will pay $10.50 next year, grow 15% in year 2, 20% in year 3, 25% in year 4 and then 5% thereafter. Assuming a return of 16%, what is the most you will pay for this stock?

  Calculate the best-case and worst-case NPV figures

We are evaluating a project that costs $744,000, has a six-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 45,000 units per year. Calculate the best-case and ..

  What is the expected return on the portfolio composed

The expected return of security A is 20% and that of security B is 10%. Also, the standard deviation of security A is 4% and that the standard deviation of security B is 2%. The correlation coefficient between A and B is 0.0. a. (3) What is the expec..

  Analysts estimate that a bond has an equal probability

Analysts estimate that a bond has an equal probability of being priced at either $940 or $1,050 one year from today. The bond is also callable at any time at $1,020. What is the expected value of this bond in one year?

  What is the npv of an investment

What is the NPV of an investment that will cost us $10,000 right now and expects to have cash flows of $1,220 in 1 year, $3,000 in 2 years, and $9,000 in 3 years? Assume a required return of 12%.

  Smaller concluding withdrawal at the end of the next year

You just received a $18000 bonus check! You deposit it in an account which earns 9.25% compounded annually. How many full withdrawals of $4500 at the end of each year can be made? What is the amount of the smaller concluding withdrawal at the end of ..

  Passive and active equity portfolio management techniques

Explain the passive and active equity portfolio management techniques, providing examples where possible. How do the goals differ for portfolio managers for each technique?

  Research the concept of the consumption tax

Think about: What if the income tax was eliminated in favor of a consumption tax? Research the concept of the consumption tax. Propose a consumption tax system that will meet the criteria of "good" tax in other word that is "fair".

  Create a chart summarizing the details of the investment

Create a chart summarizing the details of the investment for both Bob and Lisa. - Explain the results in terms of time value of money.

  The market portfolio and the risk-free asset

Consider the following information concerning three portfolios, the market portfolio, and the risk-free asset: Portfolio RP σP βP X 13.00 % 30.00 % 1.30 Y 12.00 25.00 1.10 Z 7.00 15.00 .75 Market 10.10 20.00 1.00 Risk-free 5.00 .00 .00 Assume that th..

  Price different for options than for other securities

Using the Black-Scholes model, explain what happens to the value of a call as S, T, and s2 change. Why is the relationship between risk and price different for options than for other securities?

  Calculate the cost of capital for each level of debt

Calculate the cost of capital for each level of debt and equity indicated and what typically happens to the cost of capital? Why?

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