Amity Campus

Uttar Pradesh
India 201303

ASSIGNMENTS
PROGRAM: MFC
SEMESTER-IV
Subject Name
Study COUNTRY
Roll Number (Reg.No.)
Student Name

: REAL ESTATE INVESTMENT

: BOTSWANA
: MFC001112014-20160175
: MPHO PELOEWETSE TAU

INSTRUCTIONS
a Students are required to submit all three assignment sets.
ASSIGNMENT
Assignment A
Assignment B
Assignment C

DETAILS

MARK
S
Five Subjective Questions
10
Three Subjective Questions + Case Study 10
Objective or one line Questions
10

b
c
d
e

Total weightage given to these assignments is 30%. OR 30 Marks

All assignments are to be completed as typed in word/pdf.
All questions are required to be attempted.
All the three assignments are to be completed by due dates and need to be
submitted for evaluation by Amity University.
f The students have to attached a scan signature in the form.

Signature :
Date
:

19 MAY 2016

( ) Tick mark in front of the assignments submitted

Assignment
Assignment B
Assignment C

Real Estate Investment Analysis

ASSIGNMENT A
1. Explain how a purchase money mortgage is sometimes used by a builder so

that he may reduce the amount of cash necessary.

A purchase money mortgage is a mortgage that is given by the buyer to the seller as part
of the consideration. The seller "takes back" a mortgage as a part of the purchase price. If
seller agrees to do this, the contract should contain a clause stating this willingness. In
practice, before the builder enters into negotiations for a land, he receives a commitment
from his lender for the building loan. Often the lender will not commit himself in writing
on this, but it should be understood between the builder and the lender that the lender will
give him the loan. Often when the builder reaches the proper stage of construction, he
pays to the purchase. Money mortgagee the amount due on that particular lot and
receives a partial release of mortgage from the purchase money mortgagee. When the
building is completed and the money, under the terms of the building loan, has been
completely transferred to the builder, the builder may deliver the lender a "permanent"
mortgage on the premises. The builder will generally place the house on the market when
it reaches an advanced stage of construction or completion. When he finds a purchaser,
he enters into a contract of sale with that purchaser. The purchaser will ordinarily be
financed by the same lending institution as was the builder. The lender will then lend
money to the purchaser and obtain a note or bond and a mortgage on the premises. The
builders will payoff the building loan, and the difference between that and the purchase
price will be his profit.

2. How and when is an estoppels certificate used?

An estoppels certificate is an instrument executed by a mortgagor showing the amount of the unpaid
balance due on a mortgage and stating that the mortgagor has no defenses or offsets at the time of the
execution of the certificate, in the event of foreclosure of the mortgage. This is sometimes called a
"certificate of no defense" and is generally employed in conjunction with the assignment of the mortgage.
One of the clauses of the mortgage usually states: (that) the mortgagor within ... days upon request in

person or within ... days upon request by mail will furnish a statement of the amount due on this mortgage
and whether any offsets or/defenses exist against the mortgage debt. It is this covenant that gives the
mortgagee the right to, demand that an estoppels certificate be made by mortgagor.
This instrument, which is signed by the mortgagor, is acknowledged. It states the amount due on the
mortgage at the time of the execution of the instrument and whether or not the mortgagor has a defense in
the event of a foreclosure action. The purpose of the instrument is to enable, the prospective assignee of
the mortgage to learn from the mortgagor himself the balance due under the mortgage and also whether
the mortgagor has a defense in the event of foreclosure. After once having signed and delivered the
estoppel certificate, the mortgagor is barred from later asserting that the mortgage was in a lesser amount,
or that there was a defense to a fore closure action. Thus, the, courts will not later allow the mortgagor
(for he is estopped) to assert in court that he did not owe the amount stated by him in the estoppel
certificate.
3. Discuss the actions available to the Central Bank to raise or lower interest

rate.
The interest rate is thought of as being the price paid for the use of money. Some define it
as the "rent" paid for the use of money. Money is. a commodity like other goods in the
sense that the price, or interest rate, will tend to fluctuate with shifts in the supply and
demand. For example, if the supply of money becomes scarce, and the demand for money
is high, the price, or interest rate, rises.
This suggests that if the interest rate is allowed to move up and down according to the "law of supply and
demand" those persons willing to pay the higher interest rates will be the ones who will receive the
mortgage loans. Suppose, purely hypothetical, that the interest rate rises to 10 per cent. Those persons
willing to pay 10 per cent for mortgage money would be able to get the money. Those unwilling to pay
would be unable to borrow money.
Interest Rate Control
In real life, however, there are legal restrictions on the amount persons can pay for the use of money. In
some states a mortgage bearing a rate over 6 percent would be Illegal. A housing agency-insured
mortgage bearing more than 5 per cent plus a half of one per cent for the insurance premium may be
illegal. Consequently, if the rate did go up to 10 per cent, investors faced with alternative investment
opportunities would tend to move away from mortgages and into another kind of investment to take
advantage of the higher rate. The net result of this shift would be shrinkage of the funds available for
mortgage financing.

The interest rate is raised and lowered by the Central Bank because it is thought to have a direct effect
on inflation and deflation. Inflation occurs when there is an increase in the volume of money or the rate of
money turnover in relation to the supply of goods and services for sale. In short, when an excess in the
supply of money begins chasing scarce goods and services, the prices of the goods and services will rise.
Deflation arises from an increase in .the supply of goods and services in relation to the money available
for buying them. For example, if production were suddenly to double throughout the nation, and if people
did not have the money or credit with which to purchase this increased production, then prices would
drop and deflation would result. Briefly, the thinking of the Central Bank in raising the interest rates to
avoid or reduce inflationary pressures goes something like this. Suppose a businessman desires to build
an irrigation ditch to furnish water to farmers in an arid area of the country. He estimates that his return
will be 5 per cent per year; consequently, the project will pay for itself in 20 years. He knows that he can
borrow money at 4 per cent. This being so, it pays him to proceed with the project, because he will net
himself one per cent. His actions combined with many other businessmen working on similar projects
will put inflationary pressures on the price of cement, machinery, and other commodities that might
happen to be relatively scarce.
The Central Bank thinks that when it rises the interest rate to 5 per cent this businessman, and many
others, will not proceed with their projects. The businessmen will figure they cannot earn enough money.
The net result will be no inflationary pressure on cement, machinery, and the other commodities.
If the Central Bank is worried about the possibility of deflation, they will reverse the process. In short,
they will reduce the interest rate to make the building of projects such as an irrigation ditch more
practical. For example, they might reduce the interest rate as low as 2 per cent in order to make proposed
projects more tempting from a profit view point.

4.
5. Explain the impact of interest rate on secondary mortgage market.

As of March 2007, US households owed 9.8 trillion dollars in loans secured by

residential dwellings, making up 73 percent of consumer liabilities outstanding (source:
Flow of Funds). The majority of US mortgages are long-term fixed-rate contracts
prepayable at little or no cost, a contract popular in few countries outside the United
States. Home mortgages in other Anglo-Saxon countries such as the UK, Canada and
Australia are generally closely tied to short-term interest rates. Fixed-rate contracts are
more common in continental Europe and Japan, however they generally involve

significant prepayment penalties and shorter repricing periods than in the US (Green and
Wachter, 2005; European Mortgage Federation, 2006).
Overall a high share of fixed rate mortgages (FRMs) is thought to dampen monetary transmission
(IMF, 2004; Miles, 2004), although FRM refinancing is estimated to significantly stimulate consumption
during periods of falling long term interest rates (Hurst and Stafford, 2004). From a lenders perspective,
FRMs generate significant interest rate and prepayment risk, stimulating growth in secondary
mortgage-backed securities (MBS) markets to help diversify these risks. In the UK, the high level of
adjustable-rate mortgage debt is considered to be a key impediment to the adoption of a common
European currency, since it implies that UK consumption is sensitive to short-term interest rates relative
to Euro-zone member countries (UK Treasury, 2003; Miles, 2004). In the UK, the high level of
adjustable-rate mortgage debt is considered to be a key impediment to the adoption of a common
European currency, since it implies that UK consumption is sensitive to short-term interest rates relative
to Euro-zone member countries (UK Treasury, 2003; Miles, 2004). Since the change in interest rates is
larger for FRMs, it causes some consumers who would otherwise take out a fixed rate contract to switch
to an adjustable rate mortgages (ARM).
A successful secondary market is based on effective management of the basic functions and risks
involved in mortgage lending, no matter what institutional entities are involved or what separation of
functions exists in the market. Also, the degree of competition in the primary market may have a major
bearing on the readiness of lenders to participate in a secondary market.
High rates of inflation and nominal interest rates are typical features of volatile economies that reduce the
affordability of conventional mortgages. The use of fixed rate mortgages in an inflationary environment
creates a tilt effect in which the real payments on the mortgage are much greater in its early years.
Variable rate mortgages can reduce the tilt effect but they subject borrowers to potential shock and
affordability problems. Indexed mortgages can improve affordability but are complex for both borrowers
and lenders. The affordability improvement of any instrument may not be sufficient to stimulate demand
if volatility creates uncertainty and short-term investment horizons for borrowers (Chiquier, 1998). A
volatile economy also affects the supply of funds and the characteristics of mortgages offered by lenders.
In a volatile environment, lenders are reluctant to offer long-term loans. This may lead them to not offer
mortgages or only offer short maturity loans that in turn are less affordable for consumers. Pipeline risk is
also much higher in a volatile market.
For secondary market development, mortgage rates must provide a return that is attractive relative to their
alternative investment opportunities. The more competitive is the mortgage market the greater the
potential for secondary market development. In summary when interest rates are falling there is a spread
in secondary mortgage market.

6. How is the real estate market different from commodity market?

Real estate is property comprised of land and the buildings on it as well as the
natural resources of the land including uncultivated flora and fauna, farmed crops
and livestock, water and minerals. Although media often refers to the "real estate
market" from the perspective of residential living, real estate can be grouped into
three broad categories based on its use: residential, commercial and industrial.
Examples of residential real estate include undeveloped land, houses,
condominiums and townhomes; examples of commercial real estate are office
buildings, warehouses and retail store buildings; and examples of industrial real
estate are factories, mines and farms
A commodity market is a market that trades in primary economic sector rather
than manufactured products. Soft commodities are agricultural products such as
wheat, coffee, cocoa and sugar. Hard commodities are mined, such as gold and
oil.[1] Investors access about 50 major commodity markets worldwide with purely
financial transactions increasingly outnumbering physical trades in which goods
are delivered. Futures contracts are the oldest way of investing in commodities.
Futures are secured by physical assets.[2] Commodity markets can include physical
trading and derivatives trading using spot prices, forwards, futures, and options on
futures. Farmers have used a simple form of derivative trading in the commodity
market for centuries for price risk management

ASSIGNMENT B
CASE STUDY
1.

Economists often refer to credit situations as being "easy,"

"taut," or "tight." The term "taut" seems to be used to indicate an area between
easy and tight and moving in the direction of tight.
Assume you are a mortgage banker with an opportunity of placing $300,000 worth of mortgages. You
have a large life insurance company to whom you can look as a permanent investor for this money.
Indicate

the probable flow of funds in each of the above three situations suggesting the various type

commitments, warehousing, etc., that would logically be necessary. You might also assume that you can
deliver your "package" (the entire lot of mortgages) in about 18 months.
A tight money policy affects junior financing devices in several ways. First, it has a tendency to increase
the numbers of second mortgages and contracts in use. In some parts of the country, where new
construction is heavy, bank refinancing of older homes comes to a virtual standstill. A second effect on
junior financing takes place in the market for contracts and second mortgages. Investors trade in second

mortgages and in junior contracts. However, when money is tight, the number of junior lien increases.
This makes Investors more selective.

Assume you are a mortgage banker with an opportunity of placing $300,000 worth
of mortgages. You have a large life insurance company to whom you can look as a
permanent investor for this money.
Indicate the probable flow of funds in each of the above three situations suggesting
the various type commitments, warehousing, etc., that would logically be necessary.
You might also assume that you can deliver your "package" (the entire lot of
mortgages) in about 18 months.
2. The following excerpt is from a recent issue of Realtor's Headlines:
"Secondary market purchase prices for government-backed 4 per cent mortgages were
cut, and advance commitments to buy them were discontinued last week by the Federal
National Mortgage Association.( FNMA). FNMA, which buys Federation of Housing
Association (FHA) -insured and government-guaranteed mortgages from lenders thus
renewing their cash resources, said that its prices for FHA and government insured 4
per cent mortgages would range from 90 to 92, depending upon the area and amount of
mortgagor's equity. The previous price range was 92 to 94.
. . . Unaffected by the order were FHA mortgages bearing interest rates of 5 and 5 per
cent. Their price schedules have not been changed, and they will continue to be eligible
for stand-by commitments."
1.

Explain the terms "advance commitments" and "standby commitments" as

used above.

According to Barrons Finance and Investment Dictionary an advance commitment can be define as a
written promise or agreement to take some future action. The most common example is a contractual
commitment a financial institution makes to lend funds to a borrower at a future date on terms agreed
upon in advance, for example, a Revolving Credit agreement. The lender ordinarily charges a
Commitment Fee and may require the borrower to keep part of the loan as a Compensating Balance in a
checking account at the lending institution. A Firm Commitment is absolutely binding on the lender,
whereas a Conditional Commitment is binding only if certain terms are met in the future, such as meeting
certain tests of creditworthiness. In mortgage banking, an advance commitment is called a Standby
Commitment.

A standby commitments is an agreement between a corporation and an investment banking firm or

group (the standby underwriter) whereby the latter contracts to purchase for resale, for a fee, any portion
of a stock issue offered to current shareholders in a rights offering that is not subscribed to during the
two- to four-week standby period. A right, often issued to comply with laws guaranteeing the
shareholders preemptive right, entitles its holder, either an existing shareholder or a person who has
bought the right from a shareholder, to purchase a specified amount of shares before a public offering and
usually at a price lower than the public offering price.
The risk to the investment banker in a standby commitment is that the market price of shares will fall
during the standby period.
Since construction mortgages are considered high risk loans, a lender often requires a standby or takes out
commitment from a permanent lender. A standby or take out commitment means that another lender will
provide permanent financing when a certain event, generally the completion of the project, occurs. This
assures the construction lender that permanent financing will be available to repay the construction loan if
the project is completed and other conditions are met. Sometimes, permanent lenders require a certain
percentage of a project to be rented before the financing is provided.

2.

Why should the price of mortgages vary with the "area" or geographical

location of the mortgage?

Considerable importance is attached in the modern world to the concept of land as situation. This concept
involves location with respect to markets, geographics features, other resources, and other countries. It is
significant not only because the value and use of most land is largely determined by its location and
accessibility but also because of the strategic importance of the location factor in modern economic
affairs and world politics.
The concept of land as property has legal connotations. It is concerned both with the areas over which
individuals, groups or sovereign powers exercise rights of ownership and use and with the nature of the
rights and responsibilities they hold in land. This concept of land is important because of the strong
conditioning effect it has on human attitudes and activity regarding land use all over the world. Property
institutions change with time, but the institutions that prevail at anyone time always exert a powerful
influence upon our attitudes and actions regarding land.
Moreover, significant variation exists in the pricing of higher-priced subprime refinance mortgage loans
between states, regions and localities. The Consumer Federation of America (CFA) study also found the

prevalence of racial pricing disparities, with African Americans and Hispanic homeowners more than
twice as likely to receive higher-priced subprime refinance loans as other racial and ethnic groups. The
Fed noted at the time that the incidence in higher priced subprime lending varied considerably by
geographic area. Because of this reality, the Federal Housing Administration (FHA) program, for
example, which has become a significant source of lending to minorities, prohibits lending on highervalue properties more commonly found in predominantly high-income neighborhoods

3.

Can any conclusion be drawn from this with regard to the direction in which
the interest rate is moving?
Two conclusions can be drawn from this. First the difference between g and I is not eliminated by the
shifting of capital, and as long as it is not, the incentive to shift will remain. This can create difficulties for
the monetary authorities, if they wish to try peg the interest rate at a level significantly different from the
growth rate. Second, the growth rate and the interest rate will tend to move together, that is, in the same
direction, and even to the same degree. They will tend to track one another, and this may be the most
important effect of capital arbitrage. Since prices and inflation will tend to move in the same direction
as the growth rate, prices, inflation, and the interest rate will also tend to move together

ASSIGNMENT C
MULTIPLE CHOICE QUESTIONS
1. Restrictions and limitations on real estate imposed by both private and public
entities are collectively known as
a. Easements.
b. Encroachments.
c. Eminent domain.
d. Encumbrances.
2. A _______ refers to a lien on all of the assets of a debtor, while a _______ refers
to a lien on carefully identified assets of the debtor.
a. Mechanics lien, special lien
b. General lien, mechanics lien

c. Special lien, mechanics lien

d. General lien, special lien
3. In an easement appurtenant, the property that benefits from the easement is
known as
a. Servient estate.
b. Dominant estate.
c. Gross estate.
d. Encroachment.
4. Utility companies that have rights to place electric lines, phone lines, cable tv,
gas lines, etc. hold
a. Easements in gross.
b. Easements appurtenant.
c. Gross estates.
d. Servient estates.
5. In an _______, the holder has the right to remove natural resources from
another persons property.
a. Easement
b. Profit
c. License
d. Encroachment
6 When a person wins a monetary award from a lawsuit, the losers property can
be used as a security towards paying a debt. The security interest is known as a
a. Settlement lien.
b. Tax mortgage.
c. Judgment lien.
d. Mechanics lien.
7. A lien is best described as a claim that
a. Permits a creditor to take possession of the debtors real estate.
b. Amounts to a financial security interest in the real estate.
c. Represents the creditors right of ownership in the real estate.

d. Allows a third party to use ones real estate in a prescribed manner.

8. Jones has an easement for an access road across Smiths property. _______ has
the servient estate; _______ has the dominant estate.
a. Smith, Jones
b. Jones, Smith
c. Smith, Smith
d. Jones, Jones
9. Private restrictions that limit ownership interests in real property include all
of the following except
a. Zoning.
b. Easements.
c. Adverse possession.
d. Licenses.

10. Although ownership and possession of real estate are not synonymous,
through_______ one might gain ownership by possession.
a. Zoning
b. Easements
c. Adverse possession
d. Liens
11. The mortgage document used as an encumbrance on an owners title is an
example of a
a. Special lien.
b. Broad lien.
c. General lien.
d. Judgment lien.
12 Suppose that Ralph and Ed are neighbors. Each wants to have a paved
driveway. To save money; Ralph and Ed decide to share one driveway which will
be built partially on each lot. Which of the following statements is incorrect?
a. Ralphs lot is a servient estate.
b. Eds lot is a servient estate.
c. Ralphs lot is a dominant estate.

d. Eds lot is an easement in gross.

13. The owner of the property being encroached upon has the right to force the
removal of the encroachment, but if that owner fails to force removal, the other
party may claim the legal right to continue encroaching by
a. Adverse possession.
b. Eminent domain.
c. Condemnation.
d. License.
14. Congress has regularly used the Presidents yard as a short-cut for countless
years without permission. The President put up a fence to stop the traffic. A
judge says the fence must come down, an easement has been created. What
method has been used to create the easement?
a. Prescription
b. Appointment
c. Implication
d. Reservation
15. A revocable right to temporarily use real estate for a specific purpose is an
a. License.
b. Encroachment.
c. Profit.
d. Easement.
16. If a person dies intestate and has no heirs, the state receives title to his or her
property through the power of
a. Easement.
b. Escheat.
c. Estoppel.
d. Hypothecation.
17. The lender in a mortgage arrangement is known as the
a. Grantee.
b. Grantor.
c. Mortgagor.
d. Mortgagee.

18. Promises made by a landowner or predecessor in title about how the land will
or will not be used are known as
a. Zoning laws.
b. Restrictive covenants.
c. Deed restrictions.
d. b and c only.

19.

An original title is the title obtained through discovery.

a. True
b. False
c. Inadequate
d. Irrelevant

20.

A purchase money mortgage is sometimes used by a builder so that

he may reduce the amount of cash necessary.
a. True
b. False
c. Inadequate
d. Irrelevant

21.

A mortgage can be taken back as purchase money mortgage.

a. True
b. False
c. Inadequate
d. Irrelevant

22. The partial release cause is generally used in conjunction with a blanket
mortgage.
.a. True
b. False
c. Inadequate
d. Irrelevant
23. A situation where the borrower retains possession of the property while the
lender has a security interest is called

a. Disintermediation.
b. Collateral.
c. Hypothecation.
d. Leverage.
24. Jack Miller makes a very small down payment and borrows the balance
needed to purchase real property. This is called using
a. Leverage.
b. Collateral.
c. Hypothecation.
d. Equitable title.
25. The largest providers of mortgage loans for one-family to four-family
units are
a. Pension funds.
b. Investment trusts.
c. Individuals.
d. Banks and thrifts.
26. In order to qualify for the $500,000 exemption from capital gains tax on the
sale of their home, a couple must have
a. Lived there the two years prior to selling.
b. Lived there an aggregate of two years of the past five years.
c. Lived there two years plus be at least 55 years old.
d. Never used the residence as a rental property.
27. A fiduciary relationship is primarily based on
a. The amount of money involved.
b. Personal relationship with the agent.
c. Trust and confidence in the integrity of the agent.
d. Type of organization involved.
28. All of the following are usually short-term mortgage loans EXCEPT
a. Construction loans.
b. Home improvement loans.
c. Single-family home loans.
d. Manufactured home loans.
29. Frank Mahoney, a local builder, wishes to obtain financing to build four
houses. His best source would be a
a. Savings association.
b. Commercial bank.

c. Credit union
d. Life insurance company
30. Which is NOT a prominent role of life insurance companies in real estate?
a. Purchasing blocks of mortgages on the secondary market
b. Financing large commercial projects like office buildings or shopping centers
c. Originating individual home mortgage loans
d. Financing major industrial projects
31. The primary obligation of all financial fiduciaries is to their
a. Depositors.
b. Owners.
c. Government regulators.
d. State administrators.
32. Which circumstance would create a voluntary lien?
a. Mortgage on the property
b. Overdue property taxes
c. Unpaid contractor who installed a swimming pool
d. Judgment from an unpaid hospital bill
33. A lender may prefer to have a deed of trust instead of a mortgage because
a. Foreclosure is accomplished more easily and quickly.
b. A deed of trust takes less paperwork.
e. A deed of trust has no redemption period.
d. A deed of trust does not require foreclosure.
34. Which statement regarding a note is NOT true?
a. A note is a promise to pay a debt.
b. A note is a complete contract.
c. A note must be tied to either a mortgage or deed of trust.
d. A note is a fully negotiable instrument.
35. When the mortgage loan is fully paid, the borrower (mortgagor) regains full
and clear title to the property based on which clause in the mortgage?
a. Acceleration clause
b. Power-of-sale clause
c. Satisfaction clause
d. Exculpatory clause

36. Determine the rate of return on a $ 10,000 investment that generated cash
flows of $2,500 per year for 8 years.
a.
b.
c.
d.

20.53 percent
17.59 percent
21.77 percent
18.62 percent

37. Mary Williams would like to have an annual annuity of $40,000 for 20 years
when she retires in 25 years. How much will Mary need at the end of each
year to achieve her goal? Assume an 8 percent rate of return.
a. $6491
b. $5372
c. $7219
d. $6204
38. Assume that you are an investment adviser who has introduced one of your
clients to invest their $100,000 in Treasury Notes due to mature in 2 years. If
you client becomes worried that a general increase in the level of interest
rates will reduce the market value of his bond portfolio, what should you say
to allay your clients fears?
a. You could assuage your clients fear by claiming you foresee only stable interest
rate ahead.
b. You could instruct your client to liquidate their portfolio of Treasury notes
and reinvest the proceeds in an insured bank.
c. Both a and b are true
d. You could tell your client not to worry because the market prices of short term
bonds do not fluctuate very much.
39. Assume you are an investment counselor and one of your clients read
something about interest rate risk and is worried that if market interest rates
declined her coupon interest income will likewise decline. Her bond
investments have maturities ranging from 15 to 30 years. What advice is
appropriate for this client?
a. Tell the investor to liquidate her coupon paying bonds and reinvest the money in
zero coupon bonds.
b. Tell your client not to worry: her coupon income will not vary until her coupon
bonds mature in 15 to 30 years.
c. Both a and B are true

d. The client need not worry if market interest rates are expected to rise because
coupon rates vary inversely with market interest rates and therefore her
coupon interest could increase.
40. A zero coupon bond purchased for $80 will grow to $1000 when it matures in
20 years giving the buyer a 13.46 percent annual rate of return over the 20
years. However, if the rate of inflation is 5 percent per year, what real return
will the investor earn over the 20 years? [Hint: Determine the purchasing
power of the $1000 bond at todays prices (i.e. find the present value at 5
percent) and use this value when real return is calculated]
a.
b.
c.
d.

7.05 percent
8.06 percent
9.25 percent
10.01 percent