Question
In: Finance
A PO and IO class of securities is formed backed by a $7,500,000 pool of 10-year...
A PO and IO class of securities is formed backed by a $7,500,000 pool of 10-year FRMs making annual payments with a 10% interest rate. There are no prepayments or servicer/guarantee fee. What is the present value of the PO class if the discount/market rate is 9%? Excel is recommended for this problem
Solutions
jeff jeffy answered 11 months agoRelated Solutions
$10,000,000 of a 7% 10 year FRM pool making annual payments is allocated to a PO/IO...
$10,000,000 of a 7% 10 year FRM pool making annual payments is
allocated to a PO/IO class. At approximately what level of
prepayment will the IRR of IO class be 0? (Use the excel
sheet/graph, round to the nearest percentage. For example, if your
answer is two percent, enter 2). The answer on Chegg is wrong,
please show me the work
Given a $7,500,000 pool of 10 year FRMs making annual payments with a 10% interest rate...
Given a $7,500,000 pool of 10 year FRMs making annual payments
with a 10% interest rate a PO and IO class of securities is formed.
What is the present value of the PO class if the market rate is
11%? Assume no prepayment, servicing fees, or defaults. Round to
the nearest dollar.
When the FED buys 10-year treasury notes and mortgages + student loan backed securities, inflation in...
When the FED buys 10-year treasury notes and mortgages +
student loan backed securities, inflation in the short run
will
Drop to 0%
Remain the same
Increase
When the FED buys 10-year treasury notes and mortgages +
student loan backed securities, inflation in the long run
will
Drop to 0%
Remain the same
Increase
When the FED buys 10-year treasury notes and mortgages +
student loan backed securities, consumption and investments
will
Drop to 0%
Remain the same
Increase
How...
A 10-year maturity mortgage-backed bond is issued. The bond is a zero coupon bond that promises...
A 10-year maturity mortgage-backed bond is issued. The bond is
a zero coupon bond that promises to pay $10,000 (par) after 10
years. At issue, bond market investors require a 15 percent
interest rate on the bond. What is the initial price on the bond?
(A)
$2,252
$2,472
$8,696
$10,000
Answer is A but I don't know how to do it. Please explain using
financial calculator step.
On July 1, 2012, Dacotah Chemical Company issued $4,000,000 face value,10%,IO-year bonds at $4,543,627. This price...
On July 1, 2012, Dacotah Chemical Company issued $4,000,000 face
value,10%,IO-year bonds at $4,543,627. This price resulted in an 8%
effective-interest rate on the bonds. Dacotah uses the
effective-interest method to amortize bond premium or discount. The
bonds pay semi-annual interest on each July 1 and January 1.
(Round all computations to the nearest dollar.)
(a) Prepare the journal entries to record the following
transactions.
1. The issuance of the bonds on July 1, 2012.
2. The accrual of interest...
A 49-year-old man is newly diagnosed with hypertension and has been prescribed quinapril 10-mg PO once...
A 49-year-old man is newly diagnosed with hypertension and has
been prescribed quinapril 10-mg PO once daily. The nurse checks the
patient’s blood pressure and then administers a 20-mg tablet to the
patient. Shortly after taking the medication, the patient complains
of dizziness, and the nurse notices mild swelling of the face. The
patient states he wants to lie down in bed and attempts to stand up
from the chair and move to his bed. The nurse witnesses a syncopal...
Assume 1 year interest rate on risk free securities in the united states is 10 %,...
Assume 1 year interest rate on risk free securities in the
united states is 10 %, and in UK is 6% and the current dollar/£
rate is 1.5 dollar.
A. What do you expect the forward exchange rate in
dollar or pound for 12 months to be today?
B. Would the forward exchange rate be equal to the
future spot exchange rate every day in the year? Why?
10.Calculating Salvage ValueAn asset used in a 4-year project falls in the 5-year MACRS class for...
10.Calculating Salvage ValueAn asset used in a 4-year project
falls in the 5-year MACRS class for tax purposes. The asset has an
acquisition cost of $7.6 million and will be sold for $1.4 million
at the end of the project. If the tax rate is 21 percent, what is
the aftertax salvage value of the asset?
11.Calculating NPVThurston Petroleum is considering a new
project that complements its existing business. The machine
required for the project costs $4.1 million. The marketing...
MACRS Fixed Annual Expense Percentages by Recovery Class Year 3-Year 5-Year 7-Year 10-Year 1 33.33% 20.00%...
MACRS Fixed Annual Expense Percentages by Recovery
Class
Year
3-Year
5-Year
7-Year
10-Year
1
33.33%
20.00%
14.29%
10.00%
2
44.45%
32.00%
24.49%
18.00%
3
14.81%
19.20%
17.49%
14.40%
4
7.41%
11.52%
12.49%
11.52%
5
11.52%
8.93%
9.22%
6
5.76%
8.93%
7.37%
7
8.93%
6.55%
8
4.45%
6.55%
9
6.55%
10
6.55%
11
3.28%
NPV. Mathews Mining Company is looking at a
project that has the following forecasted sales: first-year
sales are 7,000 units, and sales will grow...
MACRS Fixed Annual Expense Percentages by Recovery Class Year 3-Year 5-Year 7-Year 10-Year 1 33.33% 20.00%...
MACRS Fixed Annual Expense Percentages by Recovery
Class
Year
3-Year
5-Year
7-Year
10-Year
1
33.33%
20.00%
14.29%
10.00%
2
44.45%
32.00%
24.49%
18.00%
3
14.81%
19.20%
17.49%
14.40%
4
7.41%
11.52%
12.49%
11.52%
5
11.52%
8.93%
9.22%
6
5.76%
8.93%
7.37%
7
8.93%
6.55%
8
4.45%
6.55%
9
6.55%
10
6.55%
11
3.28%
Project cash flow and NPV. The managers of
Classic Autos Incorporated plan to manufacture classic
Thunderbirds (1957 replicas). The necessary foundry equipment will
cost a...
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