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Reika [66]
3 years ago
6

Given the following information about a CMO: - $1 million of mortgage pool principal assigned to the floater class. $15 million

assigned to the inverse floater class. - Floater class coupon rule: LIBOR + 0.2% - Inverse floater class coupon rule: 12.5% - L x LIBOR - LIBOR in the first month is 3% What is the coupon leverage L? Round your answer to two decimal points (e.g. if your answer is 1/3, write 0.33).
Business
1 answer:
kirza4 [7]3 years ago
7 0

Answer:

The answer is "0.07"

Explanation:

L or the voucher Leverage has been the mortgage pool proportion of such class to the loan pool assigned to the reverse float class. Leverage

Mortage Main swimming pool = 1 million Floaters

The principal reverse float class mortgage pool = 15 million

Voucher Leverage or L = Floater category mortgage pool / Inverse Hook shot class mortgage pool As tried to explain before,

Cupon Leverage or L = \frac{1\ million}{ 15 \ million}= 0.066667

therefore, the coupon leverage or L = 0.07.

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Mike has one hour to spend at the gym where he will jog, play handball and cycle. jogging uses 10 calories per minute, handball
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Let
x = minutes used for jogging
y = minutes used for handball
z = minutes used for cycling

Th total time spent is 1 hour (60 minutes), therefore
x + y + z = 60

Because Mike jogs as long as he cycles, therefore
x = z
Therefore
2x + y = 60
or
y = 60 - 2x                 (1)

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