Originates pool of short-term real estate loans worth

Assignment Help Financial Management

Reference no: EM131047677

Assume a bank originates a pool of short-term real estate loans worth $27 million with maturities of 3 years and with annual interest payments of 6.5 percent and return of principal at maturity. If the loans are converted to pass-through securities and the bank charges 45 basis points servicing fee per year, what is the payment expected by the holders of the securities at the end of the first year if 14% of the mortgages are expected to be prepaid?

Reference no: EM131047677

Questions Cloud

Board of directors voted to grow the dividend : The Spinnaker Company has paid an annual dividend of $1.90 per share for some time. Recently, the board of directors voted to grow the dividend by 5.5% per year from now on. What is the most you would be willing to pay for a share of Spinnaker if you..

What are the returns to the developer and the fund : A developer puts in 5% equity and a fund puts in 95% of the equity for a development deal. Cash flow is to be distributed with the following order of priorities (e.g., "the waterfall"): At the end of the first full calendar year the project is sold f..

Channel images must be consistent with the brand image : Some marketers feel that the image of the particular channel in which they sell their products does not matter--all that matters is that the right customers shop there and the product is displayed in the right way. Channel images do not really affect..

How creditors and investors would view financial performance : Describe the MAJOR differences in how Creditors and Investors would view the financial performance of any company. Highlight how each might use the information contained in Income Statements, Statements of Cash Flows and Balance Sheets differently.

Originates pool of short-term real estate loans worth : Assume a bank originates a pool of short-term real estate loans worth $27 million with maturities of 3 years and with annual interest payments of 6.5 percent and return of principal at maturity. If the loans are converted to pass-through securities a..

Estimation of the standard deviation : Three hundred students took a chemistry test. You sampled 50 students to estimate the average score and the standard deviation. How many degrees of freedom were there in the estimation of the standard deviation

With no interest or principal being repaid : A bank has a 4-year $30 million loan that pays annual payments of 9.5 percent and returns the principal at maturity. The bank can sell the loan with recourse at a price of $28.7 million and without recourse at a price of $26.8 million. If the probabi..

Show the dealer hole card until after the player stands : Do not show the dealer hole card until after the player stands, and do not show the dealer score until after the player stands. After the player stands, playout the dealer according to the rules = 17 stand.

About the rate-sensitive assets : A finance company has rate-sensitive assets of $20 million and rate-sensitive liabilities of $15 million. Should it be an interest-rate swap buyer (and make fixed-rate payments) or seller (and make variable-rate payments). Explain.

User Account

All Pages