What will the discount factor for mortgages be

Assignment Help Financial Management
Reference no: EM131210007

Assume that the risk- free rate is 5 percent and the risk premium for investing in mortgages is 2 percent. Also assume that it costs approximately 1 percent to ser vice a mortgage loan.

What will the discount factor for mortgages be?

Reference no: EM131210007

Questions Cloud

Discuss the principle of exploits : Research and discuss the principle of exploits based on buffer-overflow attacks. How can buffer-overflow attacks be avoided?
What will be the rate on a muni with comparable risk : If the interest rate on a corporate bond is 10 percent, in equilibrium, what will be the rate on a muni with comparable risk, maturity, and liquidity if the marginal investor faces a marginal tax rate of 20 percent?
List all the distinct categoryid : 1. List ProductName, SupplierID, CategoryID and Price for all Products where Price is in between 10 and 20. 2. List all Customers who live in 'Paris' or 'London'.
What will be the sequence of grants for following sequence : Consider an arbiter that uses the priority scheme described in Problem 7.13. What happens if one device requests service repeatedly. Compare the behavior of this arbiter to one that uses a fixed-priority scheme.
What will the discount factor for mortgages be : Assume that the risk- free rate is 5 percent and the risk premium for investing in mortgages is 2 percent.- What will the discount factor for mortgages be?
What is referred as little egypt : Besides the usual crops planted in the prairie region, what other crop was pondered? What was the reason? What is referred as "Little Egypt?" What is unique about this? What is the risk of a harsh winter with regards to agriculture?
Design an appropriate interface to enable the state : Design an appropriate interface to enable the state of all eight switches to be read simultaneously as a single byte. Assume the bus is synchronous and that it uses the timing sequence of Figure 7.4.
Information on daily sales report : How would you recommend the information on daily sales report, daily call reports, productivity report, pipeline, and sales forecast to be presented to management?
Differences between the actuarial and economic approaches : Explain the differences between the actuarial and economic approaches to accounting for pensions on company balance sheets.

Reviews

Write a Review

Financial Management Questions & Answers

  What will value of stock right after they pay share dividend

You are looking into a company that has never paid a dividend. They have just announced that they will be paying a one-time dividend of $20 per share in two years.  what is the value of the stock today? What will the value of the stock right after th..

  Wyatt has a long-term contract that allows them

Wyatt oil is considering drilling a new oil well that is initially expected to produce oil at a rate of 10 million barrels per year. Wyatt has a long-term contract that allows them to sell the oil at a profit of $2.50 per barrel. The cost of drilling..

  Represent source of competitive advantage in global market

Which of the following does not represent a source of competitive advantage in global marketing?

  Calculate the fair market price for the call option

Calculate the fair market price for the call option. Assume that you sell 1000 shares of the option for the fair market price + $0.12. How many shares of stock should you buy to hedge the sale? What is your profit, independent of the outcome of stock..

  Hedge the exchange rate risk of the company

A Brazilian refinery exported many tons of sugar to the U.S. and hence its profitability relies on a low exchange rate of U.S. dollars per Brazilian real (currently US$0.3315/R$). Explain why buying the call option above can help hedge the exchange r..

  On a statement of cash flows of a financially healthy

On a statement of cash flows of a financially healthy company, net income should ordinarily be:

  What is the company pre-tax cost of debt

The Bet-r-Bilt Company has a 5-year bond outstanding with a 3.80 percent coupon. Interest payments are paid semi-annually. The face amount of the bond is $1,000. This bond is currently selling for 92 percent of its face value. What is the company's p..

  Business of internet service to evaluate this new venture

The Moore, Inc. is a residential and commercial internet service provider. Now it is considering expanding into a new line of business: 3-D printer. Currently, Moore has an effective tax rate of 40% and equity to debt ratio is 1.5. What would happen ..

  What is the equivalent annual savings

Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $220,000 and sell its old low-pressure glueball, which is fully depreciated, for $40,000. The new equipment has a 10-year useful life and will sa..

  Result an initial aftertax cash savings

Scanlin, Inc., is considering a project that will result an initial aftertax cash savings of $2.1 million at the end of the first year, and these savings will grow at a rate of 2% per year indefinitely. The firm has a target debt-equity ratio of .80,..

  Calculate the correct net income for hortons for september

Before month-end adjustments are made, the September 30 trial balance of Horton Enterprise contains revenue of $9,200 and expenses of $6,500. Calculate the correct net income for Horton’s for September.

  Calculate the all in fixed rate of return

Indicate the specific combination of transactions that provides a synthetic fixed-rate asset to the pension fund. - Calculate the "all-in," fixed rate of return.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd