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Sherry wants to complete a task. For that task she has to: a) determine the savings she will gain from refinancing her existing mortgage loan
Sherry wants to complete a task. For that task she has to: a) determine the savings she will gain from refinancing her existing mortgage loan and, b) to then calculate a personal NPV of refinancing to see if it is positive. There are five rates listed below. The i on Sherry's existing mortgage = 4.3% r_f in today's markets = 1.1% If Sherry currently wishes to borrow some uncollateralized money to spend, then she would have to pay an interest rate of i = r = 7.7%. The competitive interest rate available to Sherry in today's mortgage market is 3.1% Sherry is investigating stocks. She likes a particular stock portfollio with an expected return of 9.3% Which of the following statements is true with respect to Sherry fully completing her task? Only the 4.3% rate is needed for Sherry to accomplish her task. Only the 4.3% and 3.1% rates are needed for Sherry to accomplish her task Only the 7.7%, 3.1% and 1.1% rates are needed for Sherry to accomplish her task Only the 9.3%, 4.3% and 3.1% rates are needed for Sherry to accomplish her task None of the above answers are correct
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