Tag Archives: Finance Math Puzzle

Puzzle #6: Treasury Debt

Last week was historic for U.S. Treasury debt.  The yield on the 10-year Treasury dipped below 1.44% to its lowest level ever, and the total debt held by the public* rose to $11,006,251,094,374.26. Some might argue that $11 trillion in public … Continue reading

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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

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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

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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

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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 | Tagged , , , , , | 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 | Tagged , , , , | 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 | Tagged , , , , | 12 Comments