Ibrahim is debating whether to purchase a mortgage note that is being marketed by a troubled bank. The mortgage looks good. It is backed by a piece of valuable commercial real estate and MallCo, the...

Ibrahim is debating whether to purchase a mortgage note that is being marketed by a troubled bank. The mortgage looks good. It is backed by a piece of valuable commercial real estate and MallCo, the borrower, has a good payment history. The two distinctions relevant to Ibrahim's value for this mortgage note are MallCo's sales in the coming year (Strong or Weak) and whether they will default (Yes or No) at any point over the coming year. Ibrahim values the prospect of not purchasing the loan at 0. If Ibrahim decides to purchase the loan, he faces the prospects tabulated below. The dollar values of these prospects include the purchase price of the mortgage note and appropriate time discounting.