# Category Archives: Puzzles

## David Brode

David Brode is a financial modeler in Boulder, Colorado.  An avid puzzle solver, he found this blog while searching for puzzles online.  He was intrigued by the puzzles and was curious to see a kindred spirit in Colorado.  David called … Continue reading

## Puzzle #7: The Mysterious Islands

Many years ago, a large jetliner crashed into the ocean.  No one could ever find the plane or any of its passengers or crew.  The outside world did not know that there were many survivors.  They made their way to … Continue reading

Posted in Fun, Puzzles | | 26 Comments

## Puzzle #4: Bond Pricing

Here’s another puzzle I’ve used to teach bond math. It’s not hard, but it requires some understanding of bond concepts that I will explain as we go (I beg the patience of bond mavens). Suppose you are the financial advisor … Continue reading

Posted in Bonds, Fun, Math, Puzzles | | 12 Comments

## Puzzle #3: A Better Answer

Puzzle #3 asked for the weighted average life (“WAL”) of the principal payments for a 30-year mortgage that is cut short by a balloon payment at 15 years. The following information was provided: \$100,000 Principal; 5% Interest Rate; \$536.82 Level … Continue reading

Posted in Fun, Math, Puzzles | | 5 Comments

## Puzzle #3: Mortgage with Balloon

Puzzle #1 posed the question: given a \$100,000 mortgage at 5% with monthly payments of \$536.82 for 30 years, what is the average life of the principal payments? The puzzle was to be solved with just a few simple calculations. … Continue reading

Posted in Fun, Math, Puzzles | | 22 Comments

## Puzzle #2: Answers to Follow-up Questions

Puzzle #2 asked how a \$6 million mortgage pool with a weighted average LTV of 80% could have a total property value of \$9 million when the average LTV implies a value of \$7.5 million. Chun Lee NG gave a good general … Continue reading

Posted in Fun, Math, Mortgage-Backed Securities, Puzzles | | 2 Comments

## Puzzle #2: Follow-up Questions

Puzzle #2 asked how a \$6 million mortgage pool with a weighted average LTV of 80% could have a total property value of \$9 million when the average LTV implies a value of \$7.5 million. Chun Lee NG provided a good explanation … Continue reading

Posted in Fun, Math, Mortgage-Backed Securities, Puzzles | | 1 Comment

## Puzzle #2: Weighted Average LTV

The loan-to-value ratio (“LTV”) of a mortgage equals the loan amount divided by the property’s value. The LTV is a key indicator of mortgage quality. The lower the LTV, the more likely it is that the mortgage can be paid off … Continue reading

Posted in Fun, Math, Mortgage-Backed Securities, Puzzles | | 12 Comments

## Puzzle #1: Epilogue

Puzzle #1 posed the question: given a \$100,000 mortgage at 5% with monthly payments of \$536.82 for 30 years, what is the average life of the principal payments? The puzzle was to be solved with just a few simple calculations. … Continue reading

Posted in Bonds, Fun, Math, Puzzles | | 7 Comments