Question: Acme is considering developing an office building and selling it in the future… What is the IRR of this project?
Answer: 16.20
Question: For a mortgage with no fees, the true cost of borrowing is below the mortgage interest rate.
Answer Choices:
True
False
Answer: False
Question: Marisol took out a fully amortizing 30-year mortgage for $711,000 at 7.19%. What percentage of her first payment is interest?
Answer: 88.36
Question: Which of the following mortgages will have the largest monthly payment?
Answer Choices:
Fully amortizing 30 year FRM, 4%, $200,000
Interest Only 30 year FRM, 3%, $200,000
Fully amortizing 30 year FRM, 3%, $200,000 with $50,000 balloon
Fully amortizing 30 year FRM, 3%, $200,000
Answer: Fully amortizing 30 year FRM, 4%, $200,000
Question: Pick the number closest to the current average interest rate on a 30-year fixed rate mortgage in the US.
Answer Choices:
3%
1%
7%
12%
Answer: 7%
Question: How does a yield curve look like during normal times?
Answer Choices:
An inverted U-shaped curve
A U-shaped curve
A downward sloping line
A flat line
An upward sloping line
Answer: An upward sloping line
Question: Choose the answer with all the conditions required for the government to take private property under Eminent Domain.
Answer Choices:
Property will be taken for public use and the owner will be warned two years in advance
The owner will be given double the market price for the property
Property will be taken for public use and the owner will agree to move
Property will be taken for public use and the owner will be properly compensated
Answer: Property will be taken for public use and the owner will be properly compensated
Question: Long duration bonds have higher interest rate risk than short duration bonds.
Answer Choices:
True
False
Answer: True
Question: Nastya takes out a 10-year fixed rate fully amortizing loan for $1,650,000 with 8.00% interest and annual payments. What will be her annual payments?
Answer Choices:
(numeric)
Answer: 245,898.66
Question: What is the definition of homeownership rate?
Answer Choices:
Fraction of households who bought real estate last year
Fraction of households living in units that they own
Fraction of owner-occupied residential units
Fraction of life an average household lives in a unit it owns
Answer: Fraction of households living in units that they own
Question: You took out a fully amortizing 30-year mortgage with $1,002,000 at 5.82%. After 2 years, how much have you paid toward principal?
Answer Choices:
(numeric)
Answer: 26,208.30
Question: Victoria took out a fully amortizing 30-year mortgage with the initial balance of $581,000. This mortgage has a fixed interest rate at 5.92%. How much of Victoria’s first monthly payment was attributable to principal?
Answer: 587.30
Question: You took out a fully amortizing 30-year mortgage… fixed interest rate 8.20%. After 5 years, what is the remaining balance?
Answer: 367,633.27
Question: Peifan is taking an Interest Only loan… 0.9 LTV, 15 years, 7% interest. What will be Peifan’s first payment?
Answer: 5,082.00
Question: George is looking for a fully amortizing 30-year FRM… 6.25% interest rate. Assuming he repays after 5 years, what is his annualized IRR?
Answer: 6.43
Question: Which of the following describes all cash flows of a Zero Coupon Bond?
Answer Choices:
Face value at the time of purchase
Face value at maturity and annual coupon payments
Face value at maturity
Annual coupon payments
Depends on the bond
Answer: Face value at maturity
Question: In a negatively amortizing fixed rate mortgage, the principal balance ___________ over time.
Answer Choices:
grows
stays the same
sometimes falls, sometimes grows
falls
Answer: grows
Question: Zero Coupon Bond always sells above par value.
Answer Choices:
True
False
Answer: False