Which of the following is true of an unsecured loan? A. They are exclusively for cars, houses, and other large purchases B. Collateral could be collected by the lender if the debt is not paid C. They never have any interest added onto them D. Items of value that the borrowers owns are not at risk of repossession

Which of the following is true of an unsecured loan? A. They are exclusively for cars, houses, and other large purchases B. Collateral could be collected by the lender if the debt is not paid C. They never have any interest added onto them D. Items of value that the borrowers owns are not at risk of repossession

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 6TP: When a customer is delinquent on paying a notes receivable, your company has the option to continue...

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Collateral does not reduce the risk of a loan per se, becauseA. it is not part of the loan agreementB. the risk of a loan is determined by the borrower’s willingness and ability to repay the loanC. it may be worth less than the bank thinksD. the bank may not have title to the collateral
As long as you have a strong reason for taking a loan, there is no need to understand the terms of the loan. Is it true?
Which of the following is an example of nonrecourse debt? (a) A personal loan secured by collateral where the borrower's liability is limited to the collateral. (b) Any business debt that is secured by collateral. (c) A home mortgage where the buyer is personally liable for any deficiency after foreclosure. (d) An automobile lease.
Which of the following does not relate to credit risks? a. Credit risk is the possibility of losing a lender takes on due to the possibility of a borrower not paying back a loan b. It refers to the risk that a lender may not receive the owed principal and interest c. Credit risk also describes the risk that an insurance company will be able to pay a claim. d. Credit risk is the possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations e. Credit risk describes the risk that a bond issuer may fail to make payment when requested
Assuming the borrower is in no danger of default, under what conditions might a lender be willing to accept a lesser amount from a borrower than the outstanding balance of a loan and still consider the loan paid in full?
Why would lenders, in general, tend to set loan maturities (not amortization, but when the loan must be repaid) equivalent to the expected holding period of the property (or longer)?
Ways that a lender may respond to a defaulted loan without resorting to foreclosure include all of the following except Multiple Choice defer or forgive some of the past-due payments. accept a deed in lieu of foreclosure. allow short sale to a third party. accelerate the debt. offer credit counselina.
1. if a small bank lends to a customer who wants a mortgage that is too large for the small bank to hold on its' balance sheet, which of the following can the small bank do to assist in this lending? a. engage in a participation b. pass- through the mortgage payments c sell part of the loan through correspondent banking d. make a no-recourse loan.
Which of the following is not a way in which banks lend short-term unsecured loans? a. Through a guaranteed credit line that has a commitment fee for any unused amount for the year b. Through credits cards lines with a certain credit limit c. By sending the amount earned from trust and investment products offered by the bank d. By lending a single date maturity loan to a debtor
Why can’t bank lend without a written loan policy? Explain in detail. No plagiarism.
Your company provides credit to customers. Someof these customers default on their loans, with verynegative implications for you. Describe how you coulduse discriminant analysis to learn what distinguishesthe customers who default on their loans from thosewho pay back their loans. How might you use such amodel?
Which of the following does not relate to credit risks? Select one: A. Credit risk is the possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations B. Credit risk also describes the risk that an insurance company will be able to pay a claim. C. It refers to the risk that a lender may not receive the owed principal and interest D. Credit risk describes the risk that a bond issuer may fail to make payment when requested E. Credit risk is the possibility of losing a lender takes on due to the possibility of a borrower not paying back a loan