1

You just took out a 30-year mortgage for $325,000 at 5% interest. How much of the first monthly payment will be applied to the principal balance?

Multiple Choice

• $298.65

• $389.99

• $1,354.17

• $390.50

• $1,744.67

2

Monthly payments to investors in GNMA mortgage-backed bonds include which of the following cash flows? I. mortgage interest II. fixed principal payments III. scheduled amortization of mortgage principal IV. mortgage principal prepayments

Multiple Choice

• I, II, III, and IV

• I, II, and III only

• I and II only

• I, III, and IV only

• II only

3

FHLMC and FNMA are government-sponsored enterprises charged with which one of the following duties?

Multiple Choice

• providing home mortgages directly to homeowners

• guaranteeing mortgages with the full faith and credit of the U.S. government

• promoting liquidity in the home mortgage market

• providing guarantees equal to GNMA's to the home mortgage market

• purchasing only defaulted mortgages from banking institutions

4