here find first find the monthly payment with old mortgage as: MP1 = (250,000*(5%/12))/(1-1/(1+5%/12)^360)= 1342.054
the monthly payment with new mortgage as: MP2 = (250,000*(4%/12))/(1-1/(1+4%/12)^360)=1193.5382
Thus the monthly savings = MP1-MP2 = 1342.054-1193.5382=$ 148.5158.
PD is a Bernoulli random variable therefore if 1 is the default state and 0 is the no default sate then E(PD)=PD.1+(1-PD).0=PD and
the variance(PD) = PD.(PD-1)^2+(1-PD).(PD-0)^2
variance(PD) = PD(1-PD)^2+PD^2.(1-PD) = PD.(1-PD)(1-PD+PD)=PD(1-PD).
We know that the variance of PD=sigma...
we test for significance of correlation to test whether the linear relationship between the dependent and independent variable is strong enough to use the model for the projection.
significance of the slope in a simple linear regression is used to check whether the slope coefficients are...
Yeah I agree with srini above it would be helpful to the users if all the files can be downloaded as a single zip file. It would be difficult downloading many files rather than just a single zip in one go.
Please see these if of any help:
Just to give an idea, If S is the value of the T-bonds, as the rates decline the value of S increases whereas if rates increase the value of S decreases. Since the T-bond futures value=S*exp(rT) ,r is the risk free rate and T is the time to maturity ,thus if S increases(rates decline) the...
For e.g. if the regression equation is y=b0+b1*x1+b2*x2+b3*x3 ,
suppose initial values of regressor be x1=a,x2=b and x3=c where a,b,c are constants so that the value of dependent variable y is y= b0+b1*a+b2*b+b3*c ...(1)
Now suppose we change the regressor x1 to new value x1=a' while...
Formula I: E(St) = (S0). e ^ (Commodity Discount Rate)
Both are correct except that for formula I the Lease Rate=0 => Commodity Discount Rate= Expected Growth Rate => E(St) = (S0). e ^ ( Expected Growth Rate) is the Formula II.