Which of the following statements regarding fixed-rate loans is true?   Group of answer choices a. Fixed-rate loans are preferable if interest rates are expected to rise. b. The cost of fixed-rate loans increases with an increase in the market interest rate. c. The cost of fixed-rate loans decreases with a decrease in the market interest rate. d. Fixed-rate loans are preferable if interest rates are expected to fall. e. Fixed-rate loans have periodic adjustment dates, at which time the interest rate and monthly payment are adjusted as necessary.

Q: The credit rating migration probability, is NOT directly associated with:    (select one) a. How…

A: The credit rating migration probability determined through the examination of historical data. Time…

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: Which of the following concerning short-term financing methods is CORRECT? Group of answer choices:…

A: Short-term financing is an important method to raise the funds for the short-term working capital…

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: b) At what yield (or rate) will the loan be trading at par? Explain whether it is trading above or…

A: Bond price is the price of the bond when future cash flows are discounted at the market yield.…

Q: The advantage of a "balloon payment" loan over a conventional loan  repayment plan is:   A. less…

A: Balloon payment is referred as a large lump-sum payment, which is made at the end of the loan period…

Q: Which of the following is not a source of informal short-term finance? *     A. Accrued wages   B…

A: Financing is an act or a process of providing funds to the business in order to operate the business…

Q: It is well recognized that banks are quick to increase base loan rates and quick to lower base loan…

A: Bank loan: Bank loan can be defined as the amount of money borrowed from the banking institutions.…

Q: Which of the following is not a way in which banks lend short-term unsecured loans?     Through…

A: Banks offer and provide short term loans which are unsecured to borrowers. It has been explained in…

Q: Because banks accept short term fixed rate deposits they prefer to give loans where loan rate floats…

A: Fixed interest rates are 1%-2.5% higher than the floating interest rate. The increase and decrease…

Q: When the total interest charged is linearly proportional to the initial amount of the loan, the…

A: Interest is an additional amount that is charged on deposited amount for a period. Interest is an…

Q: Which of the following statements is most correct? Select the correct response: Flexibility is an…

A: A person or a company can get a loan from the bank or the financial institution but each loan…

Q: Which of the following statements is TRUE? a. When the stated rate of interest exceeds the…

A: The stated rate is not considered the compounding factor of the time value of money. The effective…

Q: From the standpoint of the borrower, is long-term or short-term credit riskier? Explain. Would it…

A: Answer: From the borrower’s point of view, the two reasons why short term loans are considered…

Q: Which of the following is subject to change over the life of an adjustable-rate mortgage loan?…

A: An adjustable-rate mortgage is a mortgage where the interest rate applied on the outstanding balance…

Q: Consider the following problem with asymmetric information in the credit  market .Suppose the…

A: Please find the attached image

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: The rate of interest charged on loans from a country perceived to have no risk of defaulting is…

A: Risk-Free Rate: The theoretical rate of return on an investment with no risk is known as the…

Q: In the previous chapter, significant problems about the ability of borrowers to meet mortgage…

A: Introduction: Fixed interest rate charge on mortgage loan is the interest payment program with fixed…

Q: Problem 1: What are the effective annualized rates for each of the following annual stated rates and…

A: Introduction: The rate that is actually earned on an investment is called the effective annual rate.…

Q: what is the impact on the Loanable Funds Market

A: Loan-able funds are the amount or the funds available in the loan market for the borrowers. These…

Q: Which of the following statements is true about the present value factors? a. The present value…

A: Option c>> The present value factor is also known as the discount factor.  Is correct  Present…

Q: a bank that makes most of its long term loans at fixed interest rates is reducing ceedit risk and…

A: The banks can make a loan with both of the terms i.e short term loan or long term loans.

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: 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: Interest prepaid by the​ buyer, which may be used to reduce the stated interest rate the lender​…

A: It is the fees paid directly to the lender at the closing in exchange for a reduced interest rate.

Q: Which interest rate is used on very short-term loans from one bank to another?   A. Prime interest…

A: The federal funds rate is the FOMC’s target coupon rate at which commercial banks borrow and loan…

Q: Inland development projects, why do lenders insist on loan repayment rates in excess of the sales…

A: Banks/ lenders will hesitate to give loans to people who are in a desperate situation (like…

Q: Economic conditions in Fredland have caused the demand for money to increase which has changed the…

A: Bond is a type of security issued by entities and govt organization to its investors whereby the…

Q: Which one of the following statements is correct?    Real rates must exceed inflation rates.    Real…

A: Real interest rate= Nominal interest rate - Inflation rate In real interest rate, the effect  of…

Q: Which of the following are true about the long-run nominal interest rate i? Select one or more:…

A: The Correct option is 'e'

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: 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: If interest rates were to increase, then [select the statement that is most correct] Only long term…

A: Solution:- Interest rate means the rate of return prevailing in the market.

Q: Differentiate simple interest rates from compound interest rate. Would you prefer more frequent…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Contraction risk is the risk that loan principal will be repaid more rapidly than expected,…

A: The statement is FALSE. Correct Statement: Contraction risk is the risk that loan principal will be…