Question 5: Collateral is a valuable asset that is pledged to ensure loan payments. If you fail to repay the loan, the creditor may take your pledged asset. True False
Q: What does default mean? Does it occur only when borrowers fail to make scheduled loan payments?
A: Default is the risk involved in providing the mortgage loan. Default indicates the incapability of…
Q: Moral hazard or its reduction explain the following except: O A. Collateral requirements for loans.…
A: A moral hazard is the concept that a party who is protected from risk in some way will behave…
Q: secured line of credit: Select one: a. is backed up by pledged assets b. is not backed up by pledge…
A: At the time of providing the facility of the line of credit, the financial institution has…
Q: _____ is the opposite of a sinking fund. A. Accrual B. Compounding C. Amortization D.…
A: Sinking fund is setting aside some money for future possible expenses.
Q: What is the status of a lender on collateral if they fail to perfect their security interest? What…
A: A security interest in an asset that cannot be claimed by any other party is called a perfected…
Q: Which of the following is true of an unsecured loan? A. They are exclusively for cars, houses, and…
A: Loan can be defined as money that somebody lends other person in exchange of some interest that is…
Q: Liquidity risk is the risk where the borrowers not being able to repay the loan leading to banks…
A: In general terms, liquidity risk is the risk that individual, institution is not able to meet and…
Q: In finance, the expression "amortize" is used to denominate a financial process by means of which a…
A: Loan Amortization: Spreading out a debt into a series of set installments is known as amortization.…
Q: Describe some of the motives and mistakes made by the mortgage securitizers?
A: To market as well as attract borrowers for lenders.Evaluation of the borrower's credit…
Q: Many types of debt including auto loans, student loans and credit debt are securitized. The…
A: Securitization is the procedure where an issuer designs a marketable financial instruments by…
Q: Collateral does not reduce the risk of a loan per se, because A. it is not part of the loan…
A: Collateral = It refers to asset, being pledged by bank against the loan given to its customer in…
Q: Assuming the borrower is in no danger of default, under what conditions might a lender be willing to…
A: There can be majorly two possibilities under which a lender may accept a lesser amount than that of…
Q: QUESTIONS: 1. How much are the total free assets? 2 How much are the unsecured liabilities with…
A: The given question has more than 3 subparts so as per the policy of the company only the first 3…
Q: t relevant assertion should be used to record loans receivable net of an allowance for loan losses…
A: A loan receivable is that the amount of money owed from a human to a creditor (typically a bank or…
Q: How does high interest rate and setting ceiling on loans (limited credit) compensate for the…
A: Rate of interest is selected as per the credit-score of the borrower compared to the range set by…
Q: 1. Loans typically come with restrictions on the borrower called which are intended to protect the…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Which of the following has the highest relative likelihood of being defaulted in paying the…
A: The interest expense and earnings before interest and income taxes details for each of the company…
Q: As long as you have a strong reason for taking a loan, there is no need to understand the terms of…
A: Understanding the terms in a loan agreement is vital. Loan agreements are an critical a part of…
Q: Explain further the effects/impacts of default on asset-backed security (ABS) to the financial…
A: The question is based on the concept of asset-backed security (ABS). ABS is a financial instrument…
Q: Canceling the original loan and signing a new loan agreement with different terms to settle troubled…
A: The question is related to Canceling the original loan and signing a new loan agreement with…
Q: Collateral is a valuable asset that is pledged to ensure loan payments. If you fail to repay the…
A: In mortgage loans, collateral is an asset or security used to take loan.
Q: refers to the possibility that the debtors supported by bank credit are unable or unwilling to repay…
A: Commercial banks are providers of funds and financing to their customers who are in need of funds.…
Q: Why can’t bank lend without a written loan policy? Explain in detail.
A: Lending procedure: There are certain steps that are followed in the procedure. this includes the…
Q: Describe some of the motives and mistakes made by the mortgageoriginators?
A: The mortgage broker did not fix a target. Without a clear aim for the year, couriers can transfer…
Q: Does collateral reduces moral hazard by borrowers? Why?
A: Introduction: A collateral asset is an asset that a lender accepts as payment for a loan. Depending…
Q: True or false? Interest received on loans made to borrowers is an example of an investing activity.
A: The investing activities of the cash flow statement record the amount incurred for purchasing the…
Q: This clause, typically found in a loan agreement, permits the holder to declare the entire amount of…
A: An agreement that regulates the mutual promise of borrower and lender is termed as a loan agreement.…
Q: what are two types of credit
A: "We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: When do you considered a loan, receivables are impaired?
A: Impairment refers to diminution in realizable value of the asset. It may be due to various factors…
Q: Risk mitigation tools used specifically by secured lenders are least likely to include detailed…
A: The question is based on the concept of credit assessment and credit risk management. The credit…
Q: What are the stages and processes for resolving bad loans? note: include a reference
A: Bad Loans: When a loan made by a bank cannot be recovered, either partially or fully, it is termed a…
Q: The borrowing base used to guarantee collateral on an operating line of credit is highly dependent…
A: Borrowing base means the maximum amount that a borrower can borrow from a lender. Any excess of…
Q: FHA-insured loans insure lenders against a. decline in real estate values. b. loss due to…
A: Federal Housing Administration loan or FHA loan is defined as the mortgage, which is insured through…
Q: When loans are obtained from the bank or lending institutions, the accounts receivable may be…
A: Loan means the amount taken from another person to be repaid back with interest.
Q: True or false. Rate of return is the interest earned on the unpaid balance of an amportized loan
A: Rate of return is calculated to ascertain the profit and loss of an investment. It is expressed in…
Q: If a bank client requests a loan for the acquisition of real estate, what type of loan is he/she…
A: Most clients take a home loan for purchasing real estate. For this they have to comply with certain…
Q: in the 5 c's of stracturing a loan approval, what fundamental piece do you think it ignore or fall…
A: Long-term loan: It's a debt instrument that a company uses to raise money. The collateral is…
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- H5. explain what the benefits of escrow for both the borrower and the lender may be? Do disadvantages exist for either party? If you were looking to purchase an investment property would you be interested in an escrow account? Explain.A secured line of credit: Select one: a. is backed up by pledged assets b. is not backed up by pledge assets c. has a higher interest rate than an unsecured line of credit d. has a lower limit than an unsecured line of creditD4) Finance Provide a specific transaction that the bank could implement to minimize its interest rate risk. the transaction may be a new asset funded by a new liability or an asset sale under simultaneous purchase of another asset.
- 26. ‘Intermediaries, by managing the deposits they receive, are able to make long-term loans while satisfying savers’ preferences for liquid claims.’ This statement is referring to which important attribute of financial intermediation? A. Asset transformation B. Credit risk transformation C. Maturity transformation D. Denomination transformation1. True or false. Rate of return is the interest earned on the unpaid balance of an amportized loanPlease answer fast. 17: reading securitization which one of the among assertions is false: A: Collateralized mortgage obligation involves SPV B: CDO is a debt instrument where the collateral for the promise to pay is an underlying pool of the debt of obligation and even after the CDOs. C: All the assertions are correct D: When an insurance company seeks to reduce its loan exposure on its balance sheet it uses an arbitrage CDO. E: Mortgage pass-through security is a type of Mortgage-backed security but does involve SPV
- Concept Integration. Review the definitions of current and fixed assets in Chapter 17 (see page 407). Whywould a potential lender be interested in these twoclasses of assets when reviewing the balance sheet of acompany applying for a long-term loan?QUESTION 7 Which type of short-term loan is secured with Treasury bills as collateral? A. Federal funds B. Repurchase agreements C. Commercial paper D. Certificates of deposit6.-If a bank client requests a loan for the acquisition of real estate, what type of loan is he/she requesting? A) Refinance loan B) Entitlement loan or avío loan C) Mortgage loan D) Unsecured loan (Choose one option)
- Q A banker requires financial information to assess whether: I. The borrower can repay the loan amount II. The borrower can pay the interest III. The borrower can repay only the principal IV. The borrower can pay the instalments early than the stipulated time I and IV II and III I and II II and IVCommon predatory mortgage lending practices include: (select all that apply) Question 4 options: prepayment penalties. loan flipping. loaning more than the borrower's ability to repay. excessive points.4(B) investigate and compare investment options, including stocks, bonds, annuities, certificates of deposit, and retirement plans I Can state costs and benifits of credit cards and mortgages. Write a few sentences on what you know and what you might learn