What is the capitalized equivalent worth of infinite annuity

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1. What is the Capitalized Equivalent worth of an infinite annuity of $1,000 paid every other year, when the interest rate is 11% annually?

2. Calculate the price of a zero coupon bond that matures in 20 years if the market interest rate is 4 percent. Assume semi- annual compounding

3. Stratify the following Agency mortgages at a deal coupon of 4%. What are the initial pool, pass-through, and PO principal amounts, and what are the initial notional principal and coupon of the IO?

Gross Net Balance (mln $)

4.10% 3.852% 50.343

4.20% 3.934% 101.435

4.30% 4.071% 123.777

4.40% 4.153% 40.123

Reference no: EM132072973

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