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What is ann loan to value ratio at the time of purchase

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1. Assume that you are considering the purchase of a 15-year bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000 and makes semiannual interest payments. If you require a yield of 11%, what is the most you are willing to pay for these bonds?

2. Ann buys a house for $1,000,000. She gets a mortgage for $980,000 and pays the rest. What is Ann’s Loan to Value (LTV) ratio at the time of purchase? How much home equity does she have?

Reference no: EM131829311

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