1. Let's assume that you have just taken out a mortgage loan for $200,000 with an origination fee of 2 points due upfront. The mortgage term is 30 years and the mortgage rate is fixed at 4%. What is the cost of the origination fee in dollar terms?
2. Expectation hypotheis theory,
The annualized interest rate for the three-year government bonds issued in 2018 is 6%. Theinterest rate for the two-year government bonds issued in 2018 is 5%. Suppose that the ex-pectation hypothesis theory holds, what do you expect the future interest rate on the one-yearbonds from 2020 to 2021?