Question
Suppose that a borrower wishes to borrow $989,000 today using a partially amortizing 30 year loan. Specifically, the loan has constant monthly payments, a fixed
Suppose that a borrower wishes to borrow $989,000 today using a partially amortizing 30 year loan. Specifically, the loan has constant monthly payments, a fixed contract rate of 6% includes a balloon payment of $100,000 due at maturity. Compute the lenders yield assuming the borrower holds the loan to maturity.
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Handbook Of Financial Econometrics
Authors: Yacine Ait-Sahalia, Lars Peter Hansen
1st Edition
044450897X, 978-0444508973
