Determining the Note Rate

[Joshua Howaniec]

I am studying notes on the FCI Exchange and I am trying to figure out the "note rate". What does it mean? How do you value it? For example are we looking for a high NR or a low one?

[Mike Hartzog]

There is note rate and investment yield.  @Pari Thiagasundaram is illustrating the calculation for investment yield.   The note rate refers to the interest rate of the loan.  It's one of the things that is called out on the note itself.  Generally speaking,  higher is better, but it is the investment yield that is most important from an investment evaluation perspective, and that is heavily dependent on the amount you pay for the asset.