Question

definition for mortgage loan quote ? finance definition what is it a APR or EAR? What's  used...

definition for mortgage loan quote ? finance definition what is it a APR or EAR?

What's  used to discount the cash flows of a bond when calculating its market value ?

If I own a bond which pays a 3.1% coupon and the current market yield for my bond is 5.25%, is my bond's price at a premium, discount or at par?

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Answer #1

. Mortgage loan quote is the rate of interest charged on a mortgage, the rate is determined by the lender and can be a fixed rate or a fluctuating rate. Mortgage rate varies based on the credit profile of the borrower.

APR refers to the nominal annual percentage of rate while EAR refers to the effective percentage of rate or effective APR. Generally APR is the simple interest rate per year while EAR is the compound interest rate plus a fee calculated .

Yield to maturity (YTM) is the rate used to discount the cash flows of a bond when calculating the bond’s market value.

If a bond is purchased at a discount, then the yield to maturity is always higher than the coupon rate. If it is purchased at a premium, the yield to maturity is always lower. Your bond price is at a discount.

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