5. Your father is making an investment of $10,000 in i-Bond issued by the Hong Kong government. The bond has a term of three years and pays interest every 6 months. The interest payable is based on the average year-on-year rate of change in Composite Consumer Price Index (CCPI) or a fixed rate of 2% per year. In case if the change in CCPI is less than 2%, the government will pay the 2% fixed rate. When the i-Bond matures, you father can get back $10,000. Suppose you father believes the inflation rates in the coming three years are 1%, 1% and 3%, what is his expected rate of return on this investment?

1. A) 2.883%

2. B) 2.512%

3. C) 2.326%

4. D) 2%

6. Your grandmother pledges her flat to a bank and obtains a $1,500,000 reverse annuity mortgage with monthly payments over 10 years. If the interest rate of the mortgage loan is 5%, what is the monthly payment to be received by your grandmother?

A) $18,682.73 B) $15,909.82 C) $9,659.83 D) $2,155.72

7.

A) B) C) D)

8.

A) B) C) D)

Base on Question 6 above, if, unfortunately, your grandmother passes away after she has received the 78th payment. If your father wants to redeem her flat from the bank, how much does he need to pay?

$888,154.94

$975,000.24 $1,186,490.41 $1,203,881.76

The subject of an appraisal has three bedrooms, but one of the comparables used in the appraisal has two bedrooms only. If the adjustment for a bedroom is $1,500,000, the adjustment would be

a $1,500,000 increase to the comparable's selling price. a $1,500,000 decrease to the comparable's selling price. a $1,500,000 increase to the subject's selling price. a $1,500,000 decrease to the subject's selling price.