21. Using the information in the previous question, what is the value of all PO strips? 22. What would be the value of all PO strips if the expected prepayment rate in year 1 was 40%? (C) 897.07 (B) 776.86 (A) 205.86 (D) 1,102.93 23. What would be the value of all PO strips if instead the expected default rate in year 1 was 40% (and no defaults in year 2)? Assume that in case of default, BOA recovers 70% of balance. 17. Ann wants to buy a property which costs $3,500,000. She gets a mortgage with 60% LTV. What is Ann's Asset to Equity ratio for this purchase? 18. Ann wants to buy a building. The annual NOI for the building will be $100,000. She wants to get a 10 year interest only fixed rate mortgage at an annual rate of 5% with annual compounding and annual payments to buy the building. The lender has a minimum Debt Service Coverage Ratio (DSCR) of 1.20. If Ann gets a loan for $400,000, what is her DSCR? 19. You observe a REIT which currently pays a dividend per share of $3.00. You expect dividends to grow 3.5% and believe the required return for this stock should be 8.75%. Using the Gordon Growth Model, what should be the price per share? 20. BOA originates 10 Fully Amortizing Fixed Rate non-recourse Mortgages, cach has a $100 balance, 20 interest rate (no fees), 2-year term, and annual payments. BOA immediately issues IO and PO strips back by the pool of these mortgages and sells them to investors who discount payoffs at 10%. What profits d BOA make immediately? (A) 136 (B) 1,360 (C) 13,600 (D) 136,000