Which of the following was NOT stated as contributing to the complication of
estimating amount of interest carry?
(A) The loan is drawn and interest is calculated on drawn amount
(B) Revenue from each type of site varies
(C) The rate of repayment of a loan depends on when the parcel is sold
(D) Development loan interest rates are usually fixed while market rates fluctuate
The coefficient of variation of the returns, also known as the risk-to-reward ratio, is
defined as:
(A) The standard deviation of returns divided by the mean return
(B) The variance of return multiplied by the mean return
(C) The variance of returns divided by the standard deviation of returns
(D) None of the above
Which of the following is an example of real options?
(A) Valuation of vacant land
(B) Valuation of projects with phases of development
(C) Valuation of a building that can be renovated
(D) All of the above
If a mortgage pool consists of five 10% FRMs totaling $500,000, five 9% FRMs
totaling $450,000, and ten 8% FRMs totaling $750,000, what is the weighted average
coupon (WAC) rate?
(A) 8.75%
(B) 8.85%
(C) 9.00%
(D) None of the above