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A four-year bond that pays interest annually has a 6% coupon rate and 5% price of $1035.50. Annual interest rates are now projected to increase 50 basiso matu 8, bond's duration is 3,81 years. What is the predicted new bond price after the interests, A) $1016.71 B) S1039.65 C) $1070.36 D) $1109.64 E) $1253.08 9. You purchase a $200,000 house and you pay 20% down, You obtain a fixed rate 30-year mortgage where the annual interest rate is 7%, what is the monthly payment? A) $1.330.61 B) $1,693.82 C) $1,064.48 D) $933.33 E) $852.96 10. A homeowner can obtain a $160,000 30-year fixed rate mortgage at a rate of 7.0% with zero points or at a rate of 6.75% with 2 points. If you will keep the mortgage for 30 years, what is th net present value of paying the points (i.e., how much can he save)? A) $4,016.22 B) $1,646.38 C) $816.22 D) S563.59 E) $920.12 risk is the risk that a borrower may prepay the mortgage in response to a decline in interest rates. A) Liquidity B) Credit C) Prepayment Mortgages differ from most other types of debt securities (ex mortgages A) have a very large fixed par value. B) cannot be sold to other parties. C) are never securitized. D) are backed by real property 12. 13. Which of the following statement is right? A) You most likely will get higher rates on your mortgage than on your B On average, 15-year fixed-rate mortgages have higher rates than 3 credit c -year fixed-rate lan. mortgages. Subprime mortgages usually charge higher rates than conventional m Subprime mortgage D) Rates on 10-year T-notes are higher than mortgage rates in the United States