In this first Structured Products origination workout. I need to calculate the weighted average return of a portfolio of loans. So I have a portfolio of loans here and I have the amount of the loan the term the spread over the base rate which in this case is three month secured overnight financing rate and you'll notice that we have a floor for that rate meaning that the rate cannot go below this given percentage and that's common particularly in a time of very low and occasionally negative rates.

And the first thing that I'm going to do is calculate the total borrowing rate here.

Which will be the spread which is in basis points.

Over that floor. The basis point is one 100th of a percent. So in order to convert this number into an actual percentage, I first have to divide by a hundred and then by 100 again and then add that to the floor. The next thing I need to do is to calculate the percentage of this particular loan relative to the entire pool of loans and to do that. I need to calculate the total loan pool which in this case is 400. So if I come back to the percentage of the pool, it's going to be the amount of this loan divided by the total pool amount and I'm going to Anchor that so I can copy it down to the other loans in the pool. So that's the weighted amount of this loan relative to the pool. So if I apply that weighting to the rate I get the weighted average return of this particular slice.

now if I copy this down I can apply that.

Set of formulas to all of the other loans in the pool. If I add up my entire column of weighted returns, I get the total weighted average return of this loan portfolio, which is 3.62% Just as a check. I'm going to go ahead and total up my waiting percentages and that should get to a hundred.

And that just tells me that I I did the math correctly.