Explain ARMs and Floating Rate Loans?

Q: Explain the term Wraparound Loans?

A: Wraparound Loans:Wraparound Loans are also called as wrap. It is a type of mortgage loan.It allows a…

Q: Define the term loan cash flow?

A: Statement of cash flow: It refers to a financial statement that shows all the cash payments and…

Q: Discusses price changes for interest rates on loans explain why this change may be taking place.

A: Interest rate are the percentage of the loan amount which the borrower needs to pay to the lender in…

Q: Explain term Buydown Loans with examples?

A: Buy down loan is a loan in which a buyer will get the loan for reduced interest rate at least during…

Q: What is London Interbank Offered Rate (LIBOR)?

A: London Interbank Offered Rate (LIBOR): It is the interbank benchmark interest rate offered by an…

Q: Importance of the “Teaser Rate” on ARMs—Residential Loans

A: Answer: Introduction: A teaser rate at the beginning of an adjustable mortgage rate (ARM) is the…

Q: Formula for interest rate parity?

A: Interest Rate Parity: It is the technique used to govern the relation between currency exchange rate…

Q: What are the effects of lending institutions on the economy?

A: Economy has different functions to maintain like the currency management, trading activities,…

Q: Explain The Need for an External Interest Rate?

A: There is a strong need for the external interest rate because it helps in making financial…

Q: What is the loan cash flow?

A: Answer: A cash flow loan is nothing but a form of debt finance in which bank lends money usually for…

Q: please use a specific example to compare what is the discount rate% and what is the investment rate…

A: Explanation:-   Discount rate % on treasury bills: The income generated on the T-bill is equal to…

Q: What is currency appreciation?

A: It is defined as the increase or improvement in the estimation of a national money over the…

Q: explain how syndicated loans are used in international markets.

A: Syndicated Loans: A syndicated loan can be described as a funding provided to a corporation , a…

Q: What is interest rate parity?

A: Interest rate parity: Interest rate parity is a theory concerning the association among spot…

Q: What is credit enhancement, and what effect does it have on debt costs?

A: Credit enhancement represents the strategy that improves the business' credit risk profile. It helps…

Q: Describe a short-term financing option and discuss the advantages and disadvantages.  Is there a…

A: Short term financing: Any loan that is obtained for a short period of time is Short Term financing.…

Q: Describe the trade-offs of extending credit.

A: Accounts receivable: Accounts receivable refers to the amounts to be received within a short period…

Q: Discuss the relationship between Credit View and Monetary Policy.

A: Monetary Policy:Monetary Policy is a policy that is planned and implemented by the central bank of a…

Q: Explain the context of monetary policy : financial stability? Example?

A: Monetary policies are actions taken to affect the economy of a country. Monetary policy basic motive…

Q: Why money markets are important ? Discuss the types of money market instruments...

A: Money market  The money market is referred to as an organized exchange market where lending and…

Q: Illustrate with examples , that Interest rate is equivalent to the savings rate from the deposits?

A: Interest received It is the amount that is received to a person for the investment made. A rate at…

Q: How does the cost of costly trade credit generally compare withthe cost of short-term bank loans?

A: Costly trade credit imply companies that make payments after the discount period as they forego the…

Q: Define Loan Refinancing?

A: Introduction: A loan refinancing permits a debtor to replace their present obligation of debt with…

Q: How is the Equivalence Calculations made with Effective Interest Rates?

A: The formula for Effective annual rate is  Where, r - rate of return n - number of compounding.…

Q: How can we determine the borrowing rate of return?

A: The borrowing rate of return is the return that is charged on the borrowings made by the firms or…

Q: whats the difference between finance and international finance?

A: The difference among finance and international finance: Finance: Finance is the organization of big…

Q: Explain The Real Rate of Interest?

A: A real interest rate is an interest rate adjusted to exclude inflation impact to indicate the…

Q: discusses the impact that the recent global credit crisis has had on REIT distributions and capital…

A: REIT: Real Estate Investment Trust is the diversified real estate investment company that is listed…

Q: What are some types of credit derivatives?

A: A credit derivative is a type of financial contract where credit assets are kept as an underlying…

Q: how FHA buydown loans are structured?

A: Buydown loan is a type of loan in which lower interest rate is charged to the buyer. In such type…

Q: Explain equity participation loans?

A: Equity participation loans refer to the situation where the owner or lender will reduce the interest…

Q: Explain ARM and Floating Rate Loans?

A: Adjustable-rate mortgage (ARM): It could be a kind of contract or mortgage where the coupon rate…

Q: What is the traditional cash equivalency approach used to determine how below-market-rate loans…

A: Introduction: The given question is related to the concept of real estate finance and investments.…

Q: How are Effective Interest Rates calculated?

A: Effective interest rate is the interest earned on the investment or saving account.

Q: What are the credit transfer markets?

A: Financial market is called as a place where all securities such as bonds, shares, debentures etc.…

Q: Debt crisis  and solutions?

A: To run the business, corporations have to borrow the funds which will be repaid later with…

Q: What is the difference between a fixed rate and an adjustable rate money market instrument?

A: Money Market instruments are the financial instruments available to the investor for the short term…

Q: What’s the difference between free trade credit and costly tradecredit?

A: Trade Credit is a kind of credit financing extended by the trader or supplier of goods and services…

Q: Explain the effective lending rate (ELR) and how it is derived?

A: ELR is generally used to know the true cost of lending. This concept is useful when be borrow money…

Q: How does the cost of costly trade credit generally compare with the cost of shorttermbank loans?

A: Trade credit is that the quantity businesses owe to their suppliers on inventory, products, and…

Q: Using the money market diagram, explain the effect Of this policy measure on the real interest rate.

A:

Q: Describe the Equivalence Calculations with Effective Interest Rates?

A: The effective interest rate is the real interest rate that is charged on the loan amount when the…

Q: is the potential impact of long-term borrowing?

A: Long-term borrowings: Long term borrowings help companies to attain their long term financial…

Q: Discuss some of the most elementary terms used in fixed interest rate loans?

A: A loan is referred as the borrowed amount which is procured by the borrower from various financial…

Q: Explain the Market Value of a Loan?

A: The market price of Debt refers to the value investors would be willing to shop for a company’s debt…

Q: What is free trade credit?

A: Trade Credit is a type of credit financing extended by the trader or supplier of goods and services…