[6 points] (2) You decide to buy an apartment in London for 415,000 with a 35 year mortgage from your bank. What will be your monthly payment if you make a down payment of 15% of the purchase price and the mortgage rate is 4.25% with zero points? [12 points] B. Tiger Bank currently owns $2.5 million in U.S. Treasury bonds that mature in the year 2035. The bank has plans of selling the securities in one year's time and is concerned about future interest rates increasing. (1) What kind of risk is this bank exposed to? [2 points] (2) Explain how Tiger Bank can use forward contracts to hedge this risk. [6 points] (3) How does the counterparty in this transaction benefit? [3 points] C. Standard and Poor's has issued Oak Inc. with a credit rating of AA and Maple Inc. with a credit rating of BBB. (1) Based on this information, from which company would a risk averse investor choose? Explain your answer. [4 marks] (2) You own convertible bonds from Tucan Plc with a conversion rate of 29 shares per 1,000 face value bond. The current market value of Tucan Plc shares and bonds are 41.75 and 950 respectively. What is the conversion value of this bond? Would you consider converting Tucan Plc bonds into stock at this time? Explain your answer. [7 marks] D. As an investor based in the UK, you are concemed about the effect that Brexit will have on your UK stock portfolio. How might you diversify your stock portfolio? Provide detailed examples in your discussion