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Question
| Tranche | Principal | Coupon Rate |
| A | $40,000,000 | 9.25% |
| B | 30,000,000 | 10.00% |
| Z | 30,000,000 | 11.00% |
A mortgage company is issuing a CMO with three tranches, with the principal and coupon rate given in the table above. What will be the weighted average coupon on the CMO when issued?
(a) 9.25%
(b) 10.00%
(c) 10.08%
(d) 11.00%
Answer
This answer is hidden. It contains 1 characters.
Related questions
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A REIT has an NOI of $15 as share and currently pays a dividend of $10 a share. The dividend is projected to increase by 4percent by next year and continue to increase by 4percent per year thereafter. Assuming that the blended cap rate is 9.75percent and the required rate of return is 10.5percent, what value would the Gordon Dividend Discount Model provide?
(a) $60.15
(b) $71.89
(c) $153.85
(d) $160.00
(e) $190.00
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Duration, as referred to in this chapter, is defined as:
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(B) A measure of the weighted-average time required before all principal and interest is received on an investment
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d. Jensen's Alpha
Q:
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Q:
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If sold next year Sale price
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$2,650,000 Mortgage balance
1,000,000
900,000 Capital gain tax
112,500
135,000 Cash flow
$1,387,500
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Q:
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Q:
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Q:
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In the context of a lease, percentage rents generally indicate that:
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(b) The cost approach provides a more optimistic estimate of value
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Which of the following is NOT a component of lease rollover risk?
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(b) Costs of tenant improvements demanded by new tenants
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Q:
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Which of the following is also referred to as a negative amortization loan?
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All other things being equal, which of the following best describes the effects of leverage on an investment's risk-return characteristics (assuming the expected return is greater than the lending rate)?
(a) Lower expected return, lower risk
(b) Lower expected return, higher risk
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Q:
Under which conditions would one be MOST LIKELY to see an interest rate swap?
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One benefit of leverage is that it reduces the variation in returns or losses.
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Q:
The real estate industry:
(a) Is highly competitive
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(e) None of the above