Among the following options are the main characteristics (purpose of the credit, term, interest collection and guarantees) of the Direct Loan. Choose the 4 correct answers. A) To finance the purchase of machinery
Q: Consider an Fl with the following off-balance- sheet items: A two-year loan commitment with a face…
A: Credit equivalent amount is the total of all the items which comes under off-balance sheet exposure.…
Q: which of the following conditions indicates that a loan assumption is least advisable? An existing…
A: Loan Assumption In a simple term loan assumption which indicates that financial obligation which was…
Q: A firm took a one-year loan of $30,000 from a bank. Given the nominal interest rate is 6% p.a. and…
A: Nominal Rate = 6% p.a. No. of compounding period = 1
Q: b) At what yield (or rate) will the loan be trading at par? Explain whether it is trading above or…
A: The bond price is the sum of the present discounted value of the future cash stream generated by a…
Q: Find the amount (in $) of interest and the maturity value of the loans. Use the formula MV = P + I…
A: Given, The Principal value is $145000 Rate is 15 1/2% Time period is 5 months
Q: n each pair below, indicate which asset exhibits the greatest credit risk. Describe why. a.…
A: Credit risk is where counter party is unable or unwilling to fulfil its obligations. In the case of…
Q: a. What interest rate would make it worthwhile to incur a compensating balance of $16,000 in order…
A: The compensating balance is the bare minimum that the borrower agrees to retain with the lender; it…
Q: Team, please create an amortization schedule which shows different dollar amounts you borrow at…
A: The correct answer for the above mentioned answer is given in the following steps for your reference…
Q: Identify the types of information that can readily be deter-mined from an amortization table for an…
A: Meaning of amortization table Amortization table is a table which consists of all the details…
Q: In a mortgage loan that requires periodic paym= fully amortize the loan, the final that do not ment…
A: Mortgage securitization is the process of clubbing mortgages of individuals having same features to…
Q: A. How much is the amount of the loan? B. How much is the payment on the first period? C. For the…
A: The amount of the loan is the stated loan amount. The interest component can be calculated by…
Q: All of these have a balloon payment due at the end of the loan term EXCEPT a.a fully amortized…
A: A balloon loan is a type of loan that which do not fully amortize during the tenure of the loan. As…
Q: Credit scoring is a process used to Multiple Choice determine what interest rate to charge a…
A: Credit score : it is a number between 300 - 850 which depicts consumers creditworthiness.
Q: Which of the following statements regarding fixed-rate loans is true? Group of answer choices a.…
A: Fixed rate loans are loans which have a fixed rate of interest.
Q: . Protecting Interest Income/Revenue • From the banker’s point of view, when the banker quotes a…
A: Interest rate swap It is an agreement between two parties where one party pays another a fixed…
Q: Overcollateralization refers to practice with mortgage backed security pools whereby additional…
A: As you have asked multiple questions, we will solve the first question as per policy. Request you to…
Q: 3. Find the amount (in $) of interest and the maturity value of the loans. Use the formula MV = P…
A: Solution:- When an amount is invested somewhere, it earns interest and the amount receivable at…
Q: Required Correct Option 1- The amount which borrower has to pay to lender for taking and using his…
A: Issuing the financial instruments will increase the capital , as well as the capital of the company.…
Q: Find the amount (in $) of interest and the maturity value of the loans. Use the formula MV = P + I…
A: Simple interest is calculated by multiplying principal with rate and year(s).
Q: Which one is the contractual equation for buying an FRA? a.) Loan with maturity t2 plus Deposit with…
A: FRA (Forward Rate Agreement) refers to personalised financial contracts that are traded Over the…
Q: Set Corporation is deciding which of two banks to borrow from on a 1-year basis. Bank A charges an…
A: Bank A interest rate = 18% Bank B discount rate = 17%
Q: ABC is inclined to take a bank loan that has a face amount of P5,000,000, a term of 6 months,…
A: Particulars Amount Face Value 50,00,000 Interest Rate 10% term 6 months Interest…
Q: Which of the following is true when the mortgage loan is an amortizing loan? a. At the beginning of…
A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…
Q: a. How many payments are required to settle the loan? payments Round up to the next payment b. What…
A: Loan: It represents a sum of the amount borrowed by the borrower from the lender. The borrower pays…
Q: An important application of -Select- loans. Each loan payment consists of interest and repayment of…
A: Loan amount = $11,000 Rate = 8% Time = 5 years
Q: Which of the following statements correctly describes aspects of simple interest as discussed in…
A: Simple interest is one of the methods used for charging interest on a loan by multiplying the…
Q: Which loan strategy would achieve some flexibility; no exposure to credit risk but exposure to…
A: Option number 3 is correct in the options hierarchy given.
Q: Which of the following is true? Short-term notes payable should be discounted at its present value,…
A: Note principal states the amount that the note signer agrees for paying back when the note matures…
Q: a. How many payments are required to settle the loan? Round to the next payment b. Complete the…
A: Amortization Schedule: It represents a table comprising interest payments, principal payments, the…
Q: Loans that are used to fill a gap in the time until a specific event occurs are called a. evergreen…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: With loans, spreadsheets make it easy to _____. (can be more than 1 of the options listed below) a.…
A: Loan is a value which is borrowed from the other sources like banks and this amount is repaid later…
Q: A financial institution uses a loan base rate of 4.35% and sets the credit risk premium at 6.68%.…
A: Given: Loan origination Fee LOF = 1.5% Base loan rate = 4.35% Credit risk premium CRP = 6.68%…
Q: 19. According to DU, what type of loan would you be doing if you were paying off a purchase money…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: Consider a compounding loan plan where the amounts owed at EOYS 3 and 4 are $5,800 and $6.264,…
A: First, we will calculate the compounding rate
Q: In the PMT function, what is not true about the rate argument? Group of answer choices It assumes an…
A: Rate argument in PMT function is required and not optional and it assumes annual interest rate and…
Q: Assume a bank’s review of its historical loan losses has been estimated at 1.33% for its auto loans.…
A: Formula:
Q: 1. In the most loan amortization schedules, amortization of discount or premium of the loan…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: in.......................all of the interest is paid at end of the term
A: Interest payment refers to the amount that a borrower pays on the loan amount acquired by him for an…
Q: Two types of borrowers, type A and B, are requesting a loan in the amount of $44,000. Type A repays…
A: Loan amount = $44000 Type A repayment probability = 1 Type B repayment probability = 0.76 Fraction…
Q: Using the examples from the videos, which of these types of loans require that some principal be…
A: When money is given by one party to another on the promise of repayment at the end of a specified…
Q: Find the return on a loan under the following conditions. The base rate on the loan is 5%, the risk…
A: Base Rate (Br) is 5% Risk Premium (RP) is 4% Origination Fees (OF) is 0.5% Compensating Balance…
4.-
Among the following options are the main characteristics (purpose of the credit, term, interest collection and guarantees) of the Direct Loan. Choose the 4 correct answers.
A) To finance the purchase of machinery
B) Long term
C) With real guarantees.
D) With interest charged at maturity
E) 30, 60, 90 days
F) With interest collected in advance
G) To finance
H) Without guarantees
Step by step
Solved in 5 steps
- 4.-Among the following options are the main characteristics (purpose of the credit, term, interest collection and guarantees) of the Direct Loan. Choose the 4 correct answers. A) To finance the purchase of machinery B) Long term C) With real guarantees. D) With interest charged at maturity E) 30, 60, 90 days F) With interest collected in advance G) To finance working capital H) Without guarantees (is a classroom exercise)pls refer to the image attached, 1. suppose that you have the capacity to pay, would you rather borrow a loan that is amortized monthly, or one that is amortized quarterly? 2. what is your considerations when availing a loan? (quantitative or qualitative considerations) Discuss.Which of the following statements correctly describes aspects of simple interest as discussed in lectures? Group of answer choices A) With simple interest, the future value of any cash flow is simply its current value discounted back at a rate of r% per period for n periods. B) None of the other statements are correct C) A loan that has been created that pays simple interest, will involve interest payments that are calculated on the basis of both the principal amount borrowed as well as any interest that has accumulated to date. D) By convention, simple interest is the main method used for the pricing of long-term bonds. E) More than one of the other statements are correct
- What is the first step in calculating the lender's effective yield and calculating the borrower's effective cost of funds for loans? 1. Calculate the periodic loan payment based on the appraisal value. 2. Calculate the periodic loan payment based on the tax assessor's value. 3. Calculate the periodic payment based on the contract loan amount, nominal interest rate, and full amortization period. 4. All of the above.Which of the following statement is true of amortization? The computation of loan amortization is wholly based on the computation of simple interest. Amortization solely refers to the total value to be paid by the borrower at the end of maturity. The amortization schedule represents only the interest portion of the loan. The amortization schedule provides principal, interest, and unpaid principal balance for each month. In a typical loan amortization schedule: The amount of money paid towards reducing the loan balance decreases over time. The amount of interest paid each period does not remain constant. The amount of each payment does not remain constant. The amount of interest paid each period increases over time.Which of the following is true of a fully amortized loan? A. The amount of the payment applied to the principal remains the same during the loan period. B. Equal amounts of the payment are appiled to the principal Interest, taxes, and insurance. C. Additional payments applied to the interest during the loan period reduce the number of monthly payments required. D. Additional payments applied to the principal during the loan period reduce the number of monthly payments required
- Suppose that a bank does the following: a. Sets a loan rate on a prospective loan with BR = 4.23% and ϕ = 3.16%. b. Charges a 0.33 percent loan origination fee to the borrower. c. Imposes a 9 percent compensating balance requirement to be held as noninterest-bearing demand deposits. d. Holds reserve requirements of 8 percent imposed by the Federal Reserve on the bank’s demand deposits. Calculate the bank’s ROA on this loan.Define each of the following loan terms, and explain how they are related to one another: the prime rate, the rate on commercial paper, the simple interest rate on a bank loan calling for interest to be paid monthly, and the rate on an installment loan based on add-on interest. If the stated rate on each of these loans was 5%, would they all have equal, effective annual rates? Explain.ank A has offered you a loan worth $20,000 for 180 days whereas bank B offered you the same loan but as a compensating balance loan. Which offer would you take and why, explain Why could have bank B offered a compensating balance loan.
- Hi there, quick question. For an loan with a capital amount of 2500, initiation fee of 315, interest rate of 5%, initiation of loan takes place 04/01/2021 and first paid date is 02/02/2021 (Active for 29 Days), the calculated interest for this period was calculated to be 360.45. Interest is calculated using compound interest. Is there a way to work backwards to obtain the formula? To determine the accuracy.Choose the correct letter and pls provide the solution thanks A firm’s current assets and current liabilities are P1,600.00 and P1,000.00 respectively. How much can it borrow, in a maximum, and on a short-term basis without reducing the current ratio below 1.25? *a. P2,500.00b. P1,000.00c. P1,400.00d. P3,600.00e. P3,500.00To obtain net loans from gross loans the following items must be subtracted: a. reserve for loan losses b. unearned income c. all loans in arrears d. unearned income and reserve for loan losses Assume quarterly-payments of $3,000 loan for one year at 8 percent. The APR is a. 8.24 percent b. none of the above c. 10.24 percent d. 12.42 percent Loans made to closely held firms should have a. collateral b. relationship pricing c. pro-forma statements d. guarantees of the principals