What is the average payment received by the fi

Assignment Help Finance Basics
Reference no: EM132703681

Assume an FI originates a pool of short-term real estate loans worth $33 million with maturities of six years and paying interest rates of 8 percent (paid annually). The loans are amortized.

a.) What is the average payment received by the FI (both principal and interest) if no prepayment is expected over the life of the loans?

b.) If the loans are converted into real estate certificates and the FI charges a 150 basis points servicing fee (including insurance), what are the payments expected by the holders of the securities, if no prepayment is expected?

Reference no: EM132703681

Questions Cloud

Find the price of a 1-month put option : DIY is trading at $550 per share. The stock price will either increase by 5% or decrease by 15% in the first month. If the price increases in the first month
What is proper disposition for mentally handicapped offender : A significant number of inmates at all levels of corrections is made up of the mentally handicapped. What is the impact of the mentally handicapped.
Find the npv-irr : Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the purchase of the equipment necessary to produce
Explain why you would have taken the approach : Based on your review of the "Executive Summary and Investigation Overview," write a 3- to 5-page paper that describes how you would have applied the 4 incident.
What is the average payment received by the fi : Assume an FI originates a pool of short-term real estate loans worth $33 million with maturities of six years and paying interest rates of 8 percent (paid annua
Determine what can be done to minimize discrimination : Indicate if those sentences are unethical, and then determine what can be done to minimize discrimination. Most of the sentences are retributive, resulting.
Compute the net net investment of expansion project : In addition, $500,000 in net working capital will be needed immediately. Compute the net net investment of this expansion project.
What is the effective annual rate : The quoted rate on the line is prime +5%, and the prime rate is currently 2.5%. What is the effective annual rate (EAR)?
What is the future value in 18 years of an ordinary : What is the future value in 18 years of an ordinary annuity cash flow of $2,948 every quarter of a year at the end of the period

Reviews

Write a Review

Finance Basics Questions & Answers

  Growth in sales-alter bridge mfg

Fixed assets are $427,445 and sales are projected to grow to $1,004,605. How much in new fixed assets are required to support this growth in sales?

  What is the value of the growth option

Martin Development Co. is deciding whether to proceed with Project X. The cost would be $11 million in Year 0. There is a 50% chance that X would be hugely.

  What is the balance remaining on mortgage

Mortgage payments are made at the end of each month. What is the balance remaining on this mortgage after the 60th payment?

  What is the portfolio variance

A portfolio is composed of 80% stocks and 20% bonds. The variance of stock is 170 and the variance of bonds is 140. The covariance is 30. What is the portfolio'

  Determine why misleading to compare a company

Determine why it is sometimes misleading to compare a company's financial ratios with those of other firms that operate within the same industry.

  Explain how the appreciation of the japanese

Explain how the appreciation of the Japanese yen against the U.S. dollar would affect the return to a U.S. firm that borrowed Japanese yen and used the proceeds for a U.S. project.

  What is the present value at 18 percent

Rooster Co. has identified an investment project with the following cash flows. If the discount rate is 10 percent, what is the present value of these cash flows? What is the present value at 18 percent? At 24 percent?

  How are they going about brand-building on the site itself

Visit one or more of the websites you have been following. Think about the nature of their brand, whether it is a tangible product, a services product

  What are the problems with the objective evidence and cost

What are the problems with the objective evidence and cost conventions

  How much would accumulated at the beginning of each year

Mr. Hobbit deposits $2,000 at the end of each year for the next 10 years at an interest rate of 12% per year. How much will he have accumulated.

  Powell plastics inc pp currently has zero debt its earnings

powell plastics inc. pp currently has zero debt. its earnings before interest and taxes ebit are 80000 and it is a zero

  Determining the rate of interest of brother

My uncle borrowed 5,000 bolivars (B5,00) from his brother in Caracas, Venezuela. He promised to repay the loan in two annual installments of B3,000 each.

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