University of Twente Student Theses


Risk analysis of three loan types in real estate

Nieuwenhuis, W.B.R. (2022) Risk analysis of three loan types in real estate.

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Abstract:In this thesis, we analyze the case of a real estate company considering to enlarge their asset portfolio using loans. The company made a set-up of three loan types, loans A, B, and C, with durations of 5, 10, and 15 years respectively. The company wants to repay them at maturity using the cumulative cash flow. The loans consist of a yearly direct interest, a yearly storage(increase of principal amount), the possibility of an early retraction, a possible bonus interest, and default priority rules. To analyze this, we used intuitive and Monte Carlo simulation. The simulation model focuses on the rental income of a real estate company over a time span of 15 years.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics
Programme:Industrial Engineering and Management MSc (60029)
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