24 Work this problem:   Assume that a lender offers a 15-year, $175,000 adjustable-rate mortgage (ARM) with the following terms:                         Initial interest rate = 8 percent                         Index = 1-year Treasuries                         Payments reset each year                         Margin = 1.5 percent                         Interest rate cap = 1 percent annually; 3 percent lifetime                         Discount points = 2 percent                         Negative amortization allowed             Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows:  Beginning of year (BOY) 2 = 7 percent; (BOY) 3 = 8.5 percent;               Compute the payments, loan balances, and yield for the ARM for the three-year period.   A. Year one payment; Loan balance  B. Year two payment; Loan balance  C. Year three payment; Loan balance D.  What is the yield if the loan is repaid after  3 years

25. Work this problem   An investor has $60,000 to invest in a $280,000 property. He can obtain either a $220,000 loan at 9% for 20 years, with 3 points charged at closing, or a $180,000 loan for 8.875% 20 years AND a second mortgage for $40,000 at 13.5% for 10 years.  All loans require a monthly payment and are fully amortizing. A.  What is the best alternative if the property is held to maturity (Justify your answer– which offers the cheapest cost to the borrower for each alternative?)? B. What is the best alternative if the property is held for 7 years (justify your answer)?

For problems 2, 3, 4 and 5, answer 3 of these questions. (Write “SKIP” to the one you do not want graded) The Bank A is promising to pay 8% compounded Monthly.  Bank B is across the street.  However, Bank B quotes its rates as compounded quarterly.   What rate must bank B advertise (compounded quarterly) so that depositors are indifferent between the 2 banks?   (in other words, 8% compounded quarterly is the same as X% compounded monthly).

For problems 2, 3, 4 and 5, answer 3 of these questions. (Write “SKIP” to the one you do not want graded) You are offered an investment that will pay $200 a year forever.  You require a 20% rate of return. a. What is the name of this type of payment pattern? b.  What would you pay for it?  

Which of the following techniques supports successful placement of a peripheral IV catheter?

Fill in the blank with the imperfect form of the verb provided: Example:  You read:  Mi hermano y yo (ir) mucho al doctor.                                      You write in the blank:  íbamos   4.  A Carlos le (doler) ________________ la muela y se tomó una aspirina.  

  Which of the following is NOT a name for the bird listed in this picture?

Fill in the blank with the imperfect form of the verb provided: Example:  You read:  Mi hermano y yo (ir) mucho al doctor.                                      You write in the blank:  íbamos   3.  Mis tías (estar) ____________________ muy enfermas.  

The adverb “apenas” means:  often

This style of medieval architecture was  typified by pointed arches and large stained glass windows: