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#1
05-02-2005, 02:56 AM
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Actex Computational Review 15-2
Hello,
Could someone please explain the soution of section (b) in question 15-2 in the Actex Comp Review? I don't understand how the WALA is calculated. Thanks!!
__________________
"I'm a big believer in luck. I find the harder I work the more of it I recieve." -Benjamin Franklin 
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#2
05-02-2005, 07:04 AM
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I don't it in front of me at the moment, but IIRC, this is done the same way average life calculations are done for C3 & C4. If you view this as a survival function where S(t) = remaining principal/total principal I am sure you can calculate it.
If someone hasn't already given a better explanation I will take another look at it when I get to work this morning.
__________________
I am a scientist. I am sorry to disappoint you but I have never seen an elf or a troll. But who am I to exclude their existence? - Arni Bjoernsson You are stupid and evil and do not know you are stupid and evil. ... Dumb students are educated stupid. - timecube.com Usually while I'm reading, I'm actually thinking about...midgets riding toy horses - Roto
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#3
05-02-2005, 09:19 AM
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I don't see a better way to explain it. Does that explanation make sense?
__________________
I am a scientist. I am sorry to disappoint you but I have never seen an elf or a troll. But who am I to exclude their existence? - Arni Bjoernsson You are stupid and evil and do not know you are stupid and evil. ... Dumb students are educated stupid. - timecube.com Usually while I'm reading, I'm actually thinking about...midgets riding toy horses - Roto
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#4
05-02-2005, 04:59 PM
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Well I understand the formula for the WALA in the solution, but I guess my problem is specifically why are they using 10, 10, and 5 and the principal being paid off.
__________________
"I'm a big believer in luck. I find the harder I work the more of it I recieve." -Benjamin Franklin
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#5
05-02-2005, 05:10 PM
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The question asks what happens if you change the structure from a Z-bond to a sequential pay. In sequential pay, no interest is redirected so the principal payments for Class A occur as 10, 10, and 5. The original was 12.5 and 12.5 bc 2.5 in interest is being redirected from class Z each period to pay down the principal of Class A.
__________________
I am a scientist. I am sorry to disappoint you but I have never seen an elf or a troll. But who am I to exclude their existence? - Arni Bjoernsson You are stupid and evil and do not know you are stupid and evil. ... Dumb students are educated stupid. - timecube.com Usually while I'm reading, I'm actually thinking about...midgets riding toy horses - Roto
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#6
05-03-2005, 01:34 AM
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Right! Thanks, I didn't figure that out, thanks.
__________________
"I'm a big believer in luck. I find the harder I work the more of it I recieve." -Benjamin Franklin
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