Question: QUESTION 6 A bank originates a 30 year Fully Amortizing FRM at an annual interest rate of 5% with monthly compounding and monthly payments. If

QUESTION 6 A bank originates a 30 year Fully Amortizing FRM at an annual interest rate of 5% with monthly compounding and monthly payments. If 10 years later, the bank borrows at 6%, what is this banks Net Interest Margin (NIM) on this FRM? A. -11.00% B. 6.00% C. -1.00% D. 5.00% 5 points

QUESTION 8 Jim has an annual income of $300,000. Jim is looking to buy a house that has monthly property taxes of $1,200 and monthly homeowners insurance of $300. Jim has $1,500 in monthly student loan payments and an average monthly credit card bill of $1,000. Apple bank has a maximum front end DTI limit of 25% and a maximum back end DTI limit of 35%. Jim will make the biggest mortgage payment he can that satisfies both the front end DTI limit and the back end DTI limit. Jim will get a fully amortizing 30 year FRM at an annual rate of 3.40%, with monthly payments, compounded monthly. What is the biggest mortgage loan Jim can get? A. $1,409,304.28 B. $1,071,071.25 C. $1,973,025.99 D. $139,705.05 5 points

QUESTION 9 Ann gets a 30 year 3/1 Fully Amortizing ARM for $1,000,000, with monthly payments and monthly compounding. Ann pays $10,000 in closing costs. The initial rate is 2.50%. In the future, the rate will reset to 250 basis points above the LIBOR. There are no rate caps or floors. Suppose at origination and at the rate reset the LIBOR was 1%. Part 1: What is the loan balance when the rate resets (round to nearest whole number and enter without commas, e.g. 123,456 enter as 123456)? Part 2: What is the annualized true APR for the loan (round two decimal places and enter without % sign, e.g. 4.95% enter as 4.95)? 5 points

QUESTION 10 Ann got a 30 year Fully Amortizing FRM for $1,000,000 at an annual interest rate of 6% compounded monthly, with monthly payments. After 5 years of payments, Ann can refinance the balance into a 25 year Fully Amortizing FRM at an annual interest rate of 4% compounded monthly, with monthly payments. Refinancing will cost Ann 1 point and $1,500 in closing costs. If Ann refinances into this loan and makes payments for 25 years, what will be her annualized IRR from refinancing? A. 113.09% B. 10.03% C. 120.36% D. 130.05% 5 points QUESTION 11

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