2. Suppose you bought a condo for $200,000 financing it with a $40,000 down payment of your own funds and a $160,000 mortgage loan from a bank. c. suppose the value of the condo fell from $200,000 to $150,000. Assuming you paid $200,000, financing it with $40,000 of your own money and $160,000 with a mortgage loan, and ignoring interest and other costs, calculate your rate of return on your asset (ROA) and your rate of return on your equity (ROE). What is the value of your equity stake in the condo after the price fall?
2. Suppose you bought a condo for $200,000 financing it with a $40,000 down payment of your own funds and a $160,000 mortgage loan from a bank. c. suppose the value of the condo fell from $200,000 to $150,000. Assuming you paid $200,000, financing it with $40,000 of your own money and $160,000 with a mortgage loan, and ignoring interest and other costs, calculate your rate of return on your asset (ROA) and your rate of return on your equity (ROE). What is the value of your equity stake in the condo after the price fall?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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2. Suppose you bought a condo for $200,000 financing it with a $40,000 down payment of your own funds and a $160,000 mortgage loan from a bank.
c. suppose the value of the condo fell from $200,000 to $150,000. Assuming you paid $200,000, financing it with $40,000 of your own money and $160,000 with a mortgage loan, and ignoring interest and other costs, calculate your rate of
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