Rosetree Mortgage Opportunity Fund Case SolutionPosted by markwahl barg on May 31st, 2018 Rosetree Mortgage Opportunity Fund Case Solution In December 2008, amidst the most noticeably bad money related emergency since the Great Depression, Rosetree Capital Management was assessing the purchase of a pool of U.S. residential mortgages. The firm had shaped a venture vehicle to procure vexed private home loans from banks and other spurred venders. The thought was to buy contract credits at a markdown and to work with individual borrowers to rebuild their obligations. Performing home loans could then conceivably be exchanged in the optional market. The case gives trade stream projections out different monetary situations that are uncovering of the financial aspects of vexed home loans and home dispossession. Rosetree expected to choose whether and how much to bid for the loans Excel CalculationsCF for Moderate Recession, CF for Severe Recession, Expected, CF, DF, PV Questions Covered1. In early December 2008, Isabel Villegas and her team at Rosetree Capital Management produced Loan Portfolio Annual Cashflow Projections for three different economic scenarios. For the Slow Economic Growth scenario, their projections assumed that real GDP would be positive from year-end 2008-2009. Under the Moderate Recession scenario the projections assumed that real GDP would decline by 0.1 percent to 1 percent from year-end 2008-2009. Finally, under the Severe Recession scenario, their projections assumed that real GDP would decline by 1.1 percent or more from year-end 2008-2009. Make a recommendation to the Rosetree team on how to calculate the loan portfolio’s expected annual cashflows taking into account all of the three different economic scenarios.
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