Question 2 10 Marks Charmaine Has Just Purchased An Apartment At A Price Of 10 Million She Made A Down Payment Of 1 (134.09 KiB) Viewed 33 times
Question 2 (10 marks) Charmaine has just purchased an apartment at a price of $10 million. She made a down- payment of $4 million and financed the remaining balance with a 15-year mortgage at an interest charge of 3% per annum. a) Determine the size of the fixed month-end payments. [Note: Round the percentage to 4 decimals.] (4 marks) b) Of the 150th monthly repayment, how much will be used to pay the interest charge for the month and how much for the principal repayment? (6 marks) Question 4 (17 marks) Evergrande Group issued $100 million face value bonds on January 1, 2012. The bonds carry a coupon rate of 6% with annual coupon payment. The bond matures on January 1, 2022. a) Determine the market value of the bond issued on January 1, 2012, if it was priced to produce a yield (YTM) of 10% compounded annually on that date. [Note: Round your final answer to 2 decimal places) (5 marks) b) Assume the bond is sold on January 1, 2013, with an increase in the yield of 1% to 11% compounded annually on that date. Calculate the (i) Current yield (on Jan 1, 2012) (ii) 1-year Yield on capital gain/loss (iii) 1-year Holding period yield [Note: Round your final answer to two decimal places] (12 marks)
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