User Account

All Pages

Explain why the pre-payment premium is not constant

Assignment Help Finance Basics
Reference no: EM131914565

On February 1, 2018, the interest rate difference is (i) 1.60% between the 5-year variable open and the 5-year variable closed contracts and (ii) 1.46% between the 1- year fixed closed and 1-year fixed open contracts.

Both differences are supposed to capture the effect of the pre-payment penalties on the interest rates. One would expect a relatively constant premium for the prepayment penalties on the same day. Explain why the pre-payment premium is not constant on February 1, 2018.

Reference no: EM131914565

Questions Cloud

Amount of the lump sum : The appropriate opportunity cost of funds is j2 = 9.16 %pa what is the amount of the lump sum needed today to purchase this pension?
Do you agree that corporations are too powerful : According to some polls, nearly three-quarters of Americans think corporations have too much power. Do you agree that corporations are too powerful? Explain.
Responsible lending conduct : What is Substantial Hardship according to Regulatory guide 209 Credit licensing: Responsible lending conduct?
Define stereotype threat : Define "stereotype threat." According to the authors of Stuck in the Shallow End, how do stereotype threats manifest themselves in schools?
Explain why the pre-payment premium is not constant : Explain why the pre-payment premium is not constant on February 1, 2018.
Should corporations free to donate corporate treasury fund : Should corporations be free under the law to donate corporate treasury funds as they see fit in federal elections? Explain.
What is the asset beta : The correlation between the market and asset A is 0.75, the covariance between the market and asset A is 0.045, and the standard deviation of asset A is 0.20.
Compute the new dishwashing machines net present value : Compute the new dishwashing machine's net present value. Round all dollar amounts to the nearest whole dollar. Would you recommend that it be purchased?
Government cut a tariff tax on imported goods : If a country's government cut a tariff tax on imported goods, that country's current account balance will likely _______

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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