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- 3. Based on the above promissory note. Using Banker's Rule. No use excel. a) Who is the maker of the note? b) Who is the payee of the note? c) Find the maturity value of the note. (RM14280) d) Find Y. (12/5/2014) e) Find the amount of interest charged by the payee. (RM280)Explain why y0u disagree 0r agree with the f0ll0wing statements. The answer sh0uld n0t be m0re than 3 sentences (with reference of google links) Step 1 Define Treasusy BondS & Corporate Bonds Step 2 Difference between annuity due and ordinary annuity Step 3 Treasury b0nds are riskier than c0rp0rate b0nds. All 0ther things held c0nstant; the future value 0f an 0rdinary annuity is always having a higher future value than annuity due. All 0ther things held c0nstant, the price 0r interest rate risk 0f sh0rt-term b0nd is always l0wer than l0ng-term b0ndMortgage info Purchase price $2,500,000 Holding period 2 LTV 79% Interest rate 4.0% Term 15 Amortization 15 Mortgage-Related Closing Costs Discount point (Lender) 0.75% Appraisal $500 Survey $800 Underwriting fee (Lender) $300 Origination fee (Lender) 1.25% What is the borrower's EBC? Group of answer choices 5.15 4.25 None of these are correct 4.80 4.65 Mortgage info Purchase price $2,500,000 Holding period 2 LTV 79% Interest rate 4.0% Term 15 Amortization 15 Mortgage-Related Closing Costs Discount point (Lender) 0.75% Appraisal $500 Survey $800 Underwriting fee (Lender) $300 Origination fee (Lender) 1.25% What is the borrower's EBC? Group of answer choices 5.15 4.25 None of these are correct 4.80 4.65
- KF2. A conventional mortgage purchased by FNMA requires all of the following except * A strong FICO score of at least 620 but closer to 730 to get the lowest rates * Monthly homeowners expenses won't exceed 28 percent of your gross monthly income; exceed more than 36 percent of your gross monthly income * A down payment of 20% ( or mortgage insurance) * Mortgage term must be 30 years * All of the four are required please explain whyExplain why y0u disagree 0r agree with the f0ll0wing statements. The answer sh0uld n0t be m0re than 3 sentences Step 1 Define Treasusy BondS & Corporate Bonds Step 2 Difference between annuity due and ordinary annuity Step 3 Treasury b0nds are riskier than c0rp0rate b0nds. All 0ther things held c0nstant; the future value 0f an 0rdinary annuity is always having a higher future value than annuity due. All 0ther things held c0nstant, the price 0r interest rate risk 0f sh0rt-term b0nd is always l0wer than l0ng-term b0nd.24- What is the PV of a RO 800, 6-year loan with 2% monthly compound interest? a. 3328.91 b. 192.25 c. 5354.34 d. 119.52 e. All options are wrong
- Spreadsheet Problem. Refer to the Ch10_Mort Eq Cap tab in the Excel Workbook provided on the Web site. This replicates the example discussed on page 314 of the book.a. Suppose there is an aggressive lender that is willing to allow the debt coverage ratio (DCR) to be as low as 1.0. Keep all other assumptions, including the loan interest rate and equity discount rate (before-tax equity yield), the same. How does this affect the amount that can be borrowed and the property value?b. Refer to part (a). Is it reasonable to assume that the loan interest rate and equity discount rate would be the same? If not, would you expect each to be higher or lower? Why?(J) A borrower has two alternatives for a loan: (1) issue a $185,000, 60-day, 4% note or (2) issue a $185,000, 60-day note that the creditor discounts at 4%.a. Compute the amount of the interest expense for each option.b. Determine the proceeds received by the borrower in each situation.c. Which alternative is more favorable to the borrower? Explain.Can you pleas provide clear answers for B, convexity and duration.Thank you for your time. Question 3. Bond Consider a bank with the following balance sheet (M means million): Assets Value Duration of the Asset Convexity of the Asset5yr bond bought at a yield of 3.4% (lending money) $550M 4.56212.02612yr bond bought at a yield of 4% (lending money) $800M 9.45353.565 Liabilities Value Duration of the Liability Convexity of the Liability2yr bond sold at a yield of 2.4% (borrowing money) $300M 1.941 2.3844yr bond sold at a yield of 2.8% (borrowing money) $500M 3.759 8.206 a) Calculate the equity (total asset – total liability) to asset ratio of the bank (Hint: equity to asset ratio = total equity/total asset) b) Calculate the duration and convexity of the both asset and liability sides;
- which one is correct please confirm? Q5: "The returns on the following 3-month instruments are quoted in the usual way (i.e. some as discount rates, some as interest yields). Which instrument offers the best rate of return?" 4.58% on a CD 4.5% on a treasury bill 4.55% on a repo 4.56% on commercial paperApply derecognition criteria of IFRS 9 and U.S. GAAP to Company B’s situation below: Company B sells a portfolio of 100 short-term receivables to a bank for cash by guaranteeing to buy back first 20 defaulted receivables at the amount due from the debtors. The historical default rates on such receivables are up to 10%. The customers are notified of the sale and pay directly to the bank. The bank may subsequently sell or pledge these receivables. Under IFRS, should Company B derecognize this portfolio of short-term receivables? Why? Under U.S. GAAP, should Company B derecognize this portfolio of short-term receivables? Why?Evaluating alternative notesA borrower has two alternatives for a loan: (1) issue a $360,000, 60-day,5% note or (2) issue a $360,000, 60-day note that the creditor discounts at5%.a. Calculate the amount of the interest expense for each situation.b. Determine the proceeds received by the borrower in eachsituation.c. Which alternative is more favorable to the borrower? Explain.
