(Answered) Question consider a 2 million 75 30-year mortgage with

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Question: Consider a $2 million, 7.5%, 30-year mortgage with monthly payments and an eight-year maturity with balloon.

a. How much is this loan worth at issuance if the market YTM for such loans is 7.125% BEY?

b. If instead the market yield is 7.875%, how many disbursement discount points must the lender charge to avoid doing a negative NPV deal?

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