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sesenic [268]
3 years ago
15

Suppose an institution has purchased a $250,000 mortgage loan from the loan originator and wishes to create a mortgage pass-thro

ugh security. In doing so, this institution will generate revenue by charging a servicing fee of 35 basis points. If the monthly mortgage payment on the loan is $1,250, how much income is passed through to the investor in the mortgage pass through each month (rounded to the nearest dollar)
Business
1 answer:
Andre45 [30]3 years ago
6 0

Answer: $1,177

Explanation:

First we calculate the Monthly service fee by the formula,

Monthly servicing fee = Monthly servicing fee rate * Outstanding loan balance,

The service fee is 35 basis points which translates to 0.35 % and is an annual figure so we will adjust it to a monthly one,

= (0.35%/12) * $250,000

= $72.92

To calculate amount that passes through to the mortgage pass we do,

Mortgage pass-through amount = Monthly mortgage payment - Monthly servicing fee

= $1,250 - $72.92

= $1,177.08,

= $1,177

$1,177 is the income that will pass through to the investor in the mortgage pass through each month

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Rudyard Corporation had 110,000 shares of common stock and 11,000 shares of 7%, $100 par convertible preferred stock outstanding
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Answer:

$2.73

Explanation:

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2 years ago
E-Eyes has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first di
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$25.86.

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Use the following example to answer the questions that follow: Imagine that you deposit $25,000 in currency (which you had been
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