A) Calculate the TSY STRIP Forecast Interest Rate (Yield) for each year.

B) Calculate the Index Forecast Rate for each year.

C) Calculate the Index + Margin for each year.

D) Calculate the Maximum Periodic Cap for each year.

E) Calculate the Maximum Life Cap for each year.

F) Select the Contract Interest Rate for each year.

Excel format

15 year loan Forecasted Interest Rate Calculated TSY STRIP Yield Index Forecast Forecasted Interest Rate + 2% Index + Margin = Index Forecast + 2.5% Teaser Rate-3% Contract Rate- Actual Interest Rate Used That Year Periodic Cap-2% Life Cap = 5% . . You pull the following TSY STRIP prices from the Wall Street Journal website Stripped T-Bond Price Dollars 100.000 99.873 99.348 97.231 97.219 94.749 92.539 89.225 85.699 80.71 78.876 72.418 69.139 66.05 61.654 60.193 Loan Year Year 2014 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2 4 9 12 13 15