1)

1. XYZ Federal Savings has a mortgage portfolio containing mortgages with a face value of $1,500,000. They earn an average interest rate of 7% and an average term of 25 years and they are payable monthly. If the mortgages are expected to be paid off in the full 25 years (that is, no prepayments), and the market rate of interest goes to 7.5%, what is the new value of the portfolio?

2. Dave is analyzing a real estate investment with the CF below:

3. Year	Cash Flows
   0	($150,000)
   1	$10,000
   2	$20,000
   3	$30,000 + $155,000

   What is the IRR?

   What % of IRR is from operations?

   What % of IRR is from sale of property?