1. A price level adjusted mortgage (PLAM) has the following terms: loan amount: $128,000, real interest rate: 5.50%, 30-year term, 2.50 discount points, annual payments adjustments, monthly payments, observed inflation end of year one (EOY1): -3%, observed inflation end of year two (EOY2): 4%. What is the monthly payment for the third year?
$716
$715
$705
$733
2. A secondary mortgage market is where existing mortgages are:
Bought.
Sold.
Distributed.
Bought and sold.