Question
In: Finance
Consider a mortgage of $1,000,000. It has a 3.5% coupon paid monthly, maturity of 30 years,...
Consider a mortgage of $1,000,000. It has a 3.5% coupon paid monthly, maturity of 30 years, and a current price of 103.4375. What is the monthly yield of this mortgage? What is the bond equivalent yield? Show the formula used in calculating the yield.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Consider a mortgage pool with principal of $20 million. The maturity is 30 years a monthly...
Consider a mortgage pool with principal of $20 million. The
maturity is 30 years a monthly mortgage payments and the interest
rate of 10 per cent per annum. (Assume no prepayments).
What is the monthly mortgage payment (100 per cent amortising)
on the pool of mortgage?
A.$193,004.33 B.$182,236.25
C.$175,514.31 D.$176,798.75
If the mortgage-backed security insurance fee is 60 basis
points and servicing fee is 40 basis points, what is the monthly
payment on the pass-through security issued from this pool...
Consider a GNMA mortgage pool with principal of $20 million. The maturity is 30 years with...
Consider a GNMA mortgage pool with principal of $20 million.
The maturity is 30 years with a monthly mortgage payment of 10
percent per year. Assume no prepayments. (LG 24-4)
A) What is the monthly mortgage payment (100 percent
amortizing) on the pool of mortgages?
B) If the GNMA insurance fee is 6 basis points and the
servicing fee is 44 basis points, what is the yield on the GNMA
pass-through?
C) What is the monthly payment on the GNMA...
Edward signs a 30 year mortgage at 3.5% compounded monthly. The price of his house is...
Edward signs a 30 year mortgage at 3.5% compounded monthly. The
price of his house is $200,000. He makes a down payment of 40,000.
Answer the following:
What will be his monthly payments?
After 5 years, he makes a one-time payment of $50,000 (against
the remaining principle). How many months will he have remaining on
his mortgage? To avoid any confusion, he will have exactly 25 years
remaining before he makes the $50,000 in payment.
Edwards decides that instead of...
Consider the following mortgage: Loan amount $376,038 30 year maturity with monthly payments Fully amortizing Fixed...
Consider the following mortgage: Loan amount $376,038 30 year
maturity with monthly payments Fully amortizing Fixed interest rate
at 5% Suppose the investors use 50% PSA model to predict
prepayments. What would be their prediction for the dollar amount
of prepayments in the first month? Round your answer to the nearest
cent (e.g. if you answer is $1,400.677777, write 1400.68).
A U.S. government bond with 5 years to maturity pays a coupon of 3.5%. The yield...
A U.S. government bond with 5 years to maturity pays a coupon of
3.5%. The yield to maturity is 2.8%. Use Excel or Python to produce
a graph of the bond price as a function of different yields to
maturity.
Carla earns $100,000 per year now, and pays $20,000 per year on
her fixed rate mortgage. Her income is subject to a COLA clause. If
the risk-free rate of interest is 3%, and the expected inflation
rate is 2% per...
Consider a bond that has a coupon rate of 5%, five years to maturity, and is...
Consider a bond that has a coupon rate of 5%, five years to
maturity, and is currently priced to yield 6%. Calculate the
following: Macaulay duration Modified duration Percentage
change in price for a 1% increase in the yield to maturity
Consider a bond that has a coupon rate of 2%, five years to maturity, and is...
Consider a bond that has a coupon rate of 2%, five years to
maturity, and is currently priced to yield 5%. Calculate the
following: Macaulay duration Modified duration Percentage
change in price for a 1% increase in the yield to maturity
Consider a bond that has a coupon rate of 7.5%, five years to maturity, and is...
Consider a bond that has a coupon rate of 7.5%, five years to
maturity, and is currently priced to yield 7.5%. Calculate the
following: Macaulay duration Modified duration Percentage
change in price for a 1% increase in the yield to maturity
Consider a bond that has a coupon rate of 7%, three years to maturity, and is...
Consider a bond that has a coupon rate of 7%, three years to
maturity, and is currently priced to yield 5%. Calculate the
following: Macaulay duration Modified duration Percentage
change in price for a 1% increase in the yield to maturity
A bond has a maturity of 10 years, has 8% coupon rate(paid annually) and the yield...
A bond has a maturity of 10 years, has 8% coupon rate(paid
annually) and the yield to maturity is 10%. WHat is the price of
the bond? (face value is 1000)
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