Question 1 Mini Case in below Mr Smith considered to purchase a townhouse in Vancouver area Ms Angel approached Mr Smith as a real estate broker to help Mr Smith to select, negotiate and purchase the property Mr Smith finally signed Purchase agreement for a townhouse in Fraser Valley area at the purchase cost of Cnd$1 2million just recently, the completion date will be 01October2021 Mr Smith decided to go to Bank B for his mortgage, the mortgage brokerage manager Ms Catherine greeted Mr Smith and introduce him for the following mortgage information Bank B can offer the maximum loan amount (mortgage amount) capped at 6times of Mr Smith taxable income 2020 or 65 of townhouse purchase price in this case, Mr Smith annual taxable income 2020 was cnd$100,000 the cap amount is negotiable The mortgage rate nominal is 2 per annum, and financial institution in Canada is allowed to quote the rate at semi annual compounding The mortgage will be paid monthly Ms Catherine offered Mr Smith the amortization period of 20 years Smith is happy with the mortgage rate, which is low, and would like to give himself disposable cash flow more flexible Q1 a Quantitative analysis based on the information provided in above, please calculate Mr Smith monthly mortgage payment amount to his best interests (please illustrate the each number for time value calculation, step by step ) Q1 b Qualitative Subjective Question Please discuss the TWO agency relationships and possible agency problems in above mini case Illustrate how Mr Smith solve the agency problems for each respectively (In bulletin points and explain the insights implications, within 300 words)

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Question 1: Mini Case in below Mr. Smith considered to purchase a townhouse in Vancouver area. Ms. Angel approached Mr. Smith as a real estate

Question 1: Mini Case in below

Mr. Smith considered to purchase a townhouse in Vancouver area. Ms. Angel approached Mr. Smith as a real estate broker to help Mr. Smith to select, negotiate and purchase the property. Mr. Smith finally signed Purchase agreement for a townhouse in Fraser Valley area at the purchase cost of Cnd$1.2million just recently, the completion date will be 01October2021; Mr. Smith decided to go to Bank B for his mortgage, the mortgage brokerage manager Ms. Catherine greeted Mr. Smith and introduce him for the following mortgage information:

Bank B can offer the maximum loan amount (mortgage amount) capped at 6times of Mr. Smith taxable income 2020 ; or 65% of townhouse purchase price; in this case, Mr. Smith annual taxable income 2020 was cnd$100,000; the cap amount is negotiable.
The mortgage rate nominal is 2% per annum, and financial institution in Canada is allowed to quote the rate at semi-annual compounding;
The mortgage will be paid monthly;
Ms. Catherine offered Mr. Smith the amortization period of 20 years;

Smith is happy with the mortgage rate, which is low, and would like to give himself disposable cash flow more flexible.

Q1-a: Quantitative analysis; based on the information provided in above, please calculate Mr. Smith monthly mortgage payment amount to his best interests (please illustrate the each number for time value calculation, step by step ) .

Q1-b: Qualitative/Subjective Question; Please discuss the TWO agency relationships and possible agency problems in above mini case; Illustrate how Mr. Smith solve the agency problems for each respectively; (In bulletin points and explain the insights/implications, within 300 words)