Intro A forward rate agreement (FRA) pays 4.9% interest (with semiannual compounded) for 6 months on a principal of $170 million. Consider the following annual interest rates. The forward rates are for the 6-month period ending t years from now, where t is given in the first column: Risk-free 6-month forward rate compounding) Maturity spot rate (years) (with continous (with semiannual compounding) 0.5 0.037 1 0.04 0.0435 1.5 0.044 0.0527 2 0.051 0.0733 Part 1 Attempt 2/3 for 10 pts. What is the value of the FRA to the payer of the 4.9% if the FRA covers the period from 1 to 1.5 years (in $)? 0+ decimals Submit

Assume that a lender offers a 30-year, $148,000 adjustable rate mortgage (ARM) with the following terms:   Initial interest rate = 7.5 percent Index = one-year Treasuries Payments reset each year Margin = 2 percent Interest rate cap = 1 percent annually; 3 percent lifetime Discount points = 2 percent   Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BOY) 2 = 7 percent; (BOY) 3 = 8.5 percent; (BOY) 4 = 9.5 percent; (BOY) 5 = 11 percent.   Required:   a. Compute the payments and loan balances for the ARM for the five-year period.   b. Compute the yield for the ARM for the five-year period.

Assume that a lender offers a 30-year, $158,000 adjustable rate mortgage (ARM) with the following terms: Initial interest rate = 7.5 percent Index = one-year Treasuries Payments reset each year Margin = 2 percent Interest rate cap = 1 percent annually; 3 percent lifetime Discount points = 2 percent Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BOY) 2 = 7 percent; (BOY) 3 = 8.5 percent; (BOY) 4 = 9.5 percent; (BOY) 5 = 11 percent. Required: a. Compute the payments and loan balances for the ARM for the five-year period. b. Compute the yield for the ARM for the five-year period. Complete this question by entering your answers in the tabs below. Required A Required B Compute the payments and loan balances for the ARM for the five-year period. Note: Do not round intermediate calculations. Round "Payments" to 2 decimal places and "Loan Balance" to the nearest dollar amount. Payments Loan Balance Year 1 Year 2 Year 3 Year 4…

A credit union's Rate-Climber GIC pays rates of 21%, 26%, and 31% compounded semiannually in successive years of a three-year term. What will be the maturity value of $13,000 invested in this GIC? (Do not round Intermedote.colculations ond round your Anal answer to 2 declmal places.) Maturity value $1

Assume the following for a one-year rate adjustable rate mortgage loan that is tied to the one- year Treasury rate and has monthly payments: Loan amount:150,000 Annual rate cap:2% Life-of-loan cap:5% Margin:2.75% First-year contract teaser rate:5.50%One-year Treasury rate at end of year 1:5.25% One-year Treasury rate at end of year 2:5.50% Loan term in years:30 years   Given these assumptions, calculate the following: a) Initial monthly payment; b) Loan balance end of year 1; c) Year 2 contract rate; d) Year 2 monthly payment; e) Loan balance end of year 2;f) Year 3 contract rate; g) Year 3 payment.

A 3/1 ARM is made for $150,000 at 7 percent with a 30-year maturity.a. Assuming that fixed payments are to be made monthly for three years and that the loan is fully amortizing, what will be the monthly payments? What will be the loan balance after three years?b. What would new payments be beginning in year 4 if the interest rate fell to 6 percent and the loan continued to be fully amortizing?c. In (a) what would monthly payments be during year 1 if they were interest-only? What would payments be beginning in year 4 if interest rates fell to 6 percent and the loan became fully amortizing?

A KIMEP BANK quotes you and interest rate of 12,5% per annum with semiannual compounding. What is the equivalent rate with annual compounding and continuous compounding?  Choose the right answer:   a. The rate with annual compounding is 12.89% and the rate with continuous compounding is 12.12% b. The rate with annual compounding is 12.12% and the rate with continuous compounding is 9.57% c. The rate with annual compounding is 10.28% and the rate with continuous compounding is 12.89% d. The rate with annual compounding is 10.38% and the rate with continuous compounding is 12.12%

A floating rate mortgage loan is made for $185,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $1,480.   Required: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,480?

The interest rate on a GIC is 3.45% compounded semi-annually. What is the purchase price of the GIC if it has a maturity value of $36,566 in 3 years and 11 months?

Two debts, the first of $1100 due nine months ago and the second of $1700 borrownd one year ago for a term of four years at 6.9% compounded annuall, are to be replaced by a single payment one year from now. Determine the sze of the replacement payment if interest is 6.1% compounded quarterly and the focal date is one year from now. The size of the replacement payment is S3159.34 (Round to the nearest cent as needed. Round all intemediate values to six decimal places as needed.)