REM 400 problem set

# REM 400 problem set - HYEHEON UNIVERSITY Department of...

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Unformatted text preview: HYEHEON UNIVERSITY Department of Finance and Real Estate ELEM 400 Sample Questions Jfor Midterm Bram Directions: Below appears a random sample of ten questions from a previous midterm exam in REMJW. These questions are representative of the questions to be asked of you in your midterm enain on 2 March NB: While I believe the answers to these questions are all oorrect and that these problems have no typos, by undertaking to answer these questions you understand that any such error is your liability and I make no guarantees in this regard. If you think- you have found such an error after doing the problem tulioe, please be kind enough to email me so that, should there actually fit a typo in a question or an error in the ammpangring answers, I can correct it and repost this sample exam. 1. Consider a single mortgage coupon paying 310,000 in three months. Today-”s market price for this coupon. B“, is \$9, 800. Determine which of the following statehmnts is false: a the value of \$1,000.00 today is 1. 204.00 dollars receivable in three months, is \$10204. b. the value of a current dollar in terms of dollars receivable in three months, is 10,204 basis points c. the value of a current dollar in terms of dollars receivable in three months is ninety-eight cents {.98} d. the value in current dollars of \$500.00 receivable in three months is \$490.00 e. none of the above 2. Consider a residential property with a current market value of \$240, 000.00. Purchase of the property has been ﬁnanced by three lenders. The UPB currently owed the senior lender is \$100,000, that owed to the ﬁrst junior lender is \$50. 000.00, and that owed to the second junior lender is \$30,000.00. Owing to the owners sustained failure to service the coupon payments on his three mortgages the ﬁrst junior lender ﬁles a foreclosure suit. At the foreclosure sale of the property, a. if the actual price at sale is \$250,000.00, the second junior lender will talee a loss on its loan of 5,nno.nn. b. if the actual price at sale is \$250,000.00, then after paying off the senior lender the ﬁrst junior lender nor.I has \$10,000.00 equity in the property. b. if the actual price at sale is \$210,000.00, the ﬁrst junior lender will take a \$40,000. 000.00 loss on his loan c. if the actual price at sale is \$220, 000.00, the lien of the second junior lender is (actinguished d. if the actual price at sale is \$260, 000.00, all three mortgage loans are paid oﬁ' e. none of the above ...
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