1. You are a credit analyst in the asset management department of a large insurance company. The credit department is researching an investment in a syndicated loan made to a large firm. The loan is an “amortized loan” with a 7% interest rate payable semi-annually. The original term was 10 years. For analytical purposes, assume the loan trades in $1000 increments. What are the semi-annual payments on the loan?

$70.36

$72.62

$81.47

$85.00

$91.52

2. The amortized loan had an original term of 10 years but 2 years have passed. What is the outstanding balance on the loan with 8 years to maturity?

$787.59

$800.00

$850.95

$878.27

$985.31

3. Assume the loan has been outstanding for 2 years so there are 8 years to maturity. Payments on the loan are up to date and the fourth payment has just been made so the next payment is due in 6 months. The loan is currently trading at 87% of the remaining balance of the loan. What would the loan trade at in dollar terms?

$685.20

$696.00

$740.33

$764.09

$857.22

4. What is the yield to maturity on the loan?

6.31%

6.80%

9.94%

10.84%

13.09%