1. A bank makes a 30 year Fully Amortizing FRM for $1,800,000 at an annual interest rate of 4.875% compounded monthly, with monthly payments. What is the difference between the balance and the market value of the loan after 36 monthly payments if the interest rate rises to 5%? (Give the absolute value of the difference, so the answer should be a positive number.) 2. A bank makes a 30 year Fully Amortizing FRM for $1,500,000 at an annual interest rate of 5% compounded monthly, with monthly payments. Suppose inflation is 2% per year, compounded monthly. What is the real value of the 120h payment? 3. Assume the initial rate on a 1 /1 ARM is 11.50%. The loan has a margin of +265 basis points above Libor. In one year after the loan is originated, the Libor is 9.5%. What is the fully indexed rate on the loan in one year? 4. Suppose a bank pays depositors 040% on their checking deposits. The same bank makes mortgages at 3.50%. What is the bank's Net Interest Margin (NIM)? 5. A bank originates a 30 year fully amortizing FRM at an annual interest rate of 5.5%, 9 years later the bank's cost of funds is 12.50%. What is th bank's NIM on this loan? (Your answer can be positive or negative, use the correct sign!)