Question: Which of the following deed types protects the buyer from encumbrances that arose only during the time at which the current grantor held title?
Answer Choices:
Special warranty deed
General warranty deed
All of the above provide the same level of protection
Quitclaim deed
Answer: Special warranty deed
Question: Suppose you bought a 10-year coupon bond with par value $500 and coupon rate 3.60%. What is the market price two years later if the yield is 7.90%?
Answer: 375.98
Question: Aziza is purchasing a home worth $705,000 at 80% LTV, 5.60% interest, 30-year fixed loan. What are the monthly payments?
Answer: 3,237.81
Question: Mortgage originators always sell off the mortgage to someone else after issuing the loan.
Answer Choices:
True
False
Answer: False
Question: A borrower with two mortgages on their property defaults… The house sells for $479,500 in a foreclosure auction. How much of a deficiency will the first lien lender have?
Answer: 37,300.00
Question: Ann takes a 30-year FRM for $4,500,000 at 4.38% interest, paying 2 points upfront. What is Ann’s annualized IRR?
Answer: 4.65
Question: A bank offers a 20-year coupon bond with par value $2,600 and annual coupon 6.70%. If your discount rate is 7.74%, what is the maximum price you’d pay?
Answer: 2,329.30
Question: In a given FRM fully-amortized mortgage… portion to principal ______ over time and portion to interest ______ over time.
Answer Choices:
Remains the same; Remains the same
Decreases; Increases
Increases; Decreases
Cannot be determined; Cannot be determined
Remains the same; Increases
Answer: Increases; Decreases
Question: A balloon payment on an interest-only mortgage is the same as the initial balance.
Answer Choices:
True
False
Answer: True
Question: Jean purchases a house for $750,000… What is Jean’s equity as a percent of the house value?
Answer: 27.36
Question: Consider a 20-year maturity bond with par value $1000 and 6.5% coupon rate. Suppose the current market yield is 5%.
Answer Choices:
The bond will trade at par value
The bond will trade at a discount
The bond will trade at a premium
Impossible to determine
Answer: The bond will trade at a premium
Question: Your lender calculates that your maximum monthly payment can be no more than $2,580… What is the largest loan you can obtain?
Answer: 408,183.91