Question 3 (19 marks) You plan to purchase a $5,500,000 house using a 25-year mortgage obtained from HSBB Bank. The mortgage rate offered to you is fixed at 6% p.a.. You will make a down payment of 30% of the purchase price. (a) Calculate the monthly mortgage payment by using mortgage payment factors table below. (2 marks) (3 marks) (b) Calculate the total interest payment of the mortgage. (c) Explain the tradeoff between foreclosure and power of sale adopted by financial institutions if the borrowers default their mortgage payment. (4 marks) (d) Explain the tradeoff between lending loans to small corporations and large corporations by commercial banks. (4 marks) (e) Identify and explain THREE measures adopted by commercial banks to mitigate credit risks of lending to large corporations. (6 marks) Mortgage payment factors table [Principal and interest factors per $1,000 of loan amount] 15 Years Term Rate 30 Years 25 Years 20 Years 5.0% $5.37 $5.85 $ 6.60 $7.91 5.5 5.68 6.14 6.88 8.17 6.0 6.00 6.44 7.16 8.43 6.5 6.32 6.67 7.45 8.71 7.0 6.65 7.06 7.75 8.98 7.5 6.99 7.39 8.06 9.27 8.0 7.34 7.72 8.36 9.56 8.5 7.69 8.05 8.68 9.85 9.0 8.05 8.39 9.00 10.14