Chapter 9, Problem 1OTN

Which of the following is not a way in which banks lend short-term unsecured loans?     Through credits cards lines with a certain credit limit Through a guaranteed credit line that has a commitment fee for any unused amount for the year By sending the amount earned from trust and investment products offered by the bank By lending a single date maturity loan to a debtor

What type of loan/s these banks offer? Explain how they use this type of loan among their clients.

If you were a wise credit card user, under which of the following conditions would you consider using a credit card to finance an expensive purchase? a. If I haven't reached my credit limit and I really want to item b.If I believe my money situation will be better (for example, a better-paying job) in the future than it is now. c.If I have the money to pay for the item in my bank account and plan to immediately pay the balance in full. d. If my card has good rewards on it.

You are the loan department supervisor for a bank. This installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff for the loan (in $). (Round dollars to the nearest cent.

I need help for D, E, and G please   You are a loan officer at the West Elm Savings and Loan. Mr. and Mrs. Brady are in your office to apply for a mortgage loan on a house they want to buy. The house has a market value of $170,000. Your bank requires  1/5  of the market value as a down payment.   (a) What is the amount (in $) of the down payment? $     (b) What is the amount (in $) of the mortgage for which the Bradys are applying? $     (c) Your bank offers the Bradys a 30 year mortgage with a rate of 5%. At that rate, the monthly payments for principal and interest on the loan will be $5.37 for every $1,000 financed. What is the amount (in $) of the principal and interest portion of the Bradys' monthly payment? $     (d) What is the total amount (in $) of interest that will be paid over the life of the loan? $   (e) Your bank also requires that the monthly mortgage payments include property tax and homeowners insurance payments. If the property tax is $1,710 per…

Which interest rate is used on very short term loans from one bank to another? A. PRIME INTEREST RATE  B.TREASURY BILL RATE C. COMMERCIAL PAPER RATE D. FED FUNDS RATE

Which interest rate does not typically move with the bank rate? the rate on loans negotiated by credit unions the rate on mortgages the rate on personal credit lines the rate on credit cards the rate on loans secured by financial assets

Which interest rate is used on very short-term loans from one bank to another?   A. Prime interest rate   B. Commercial paper rate   C. Treasury bill rate   D. Fed funds rate

One example of financial intermediation is the selling of mortgages by banks to a third party. If you borrow money from the Bank of America to buy a house, the bank immediately sells your mortgage to a third party like Fannie Mae. This transaction gives Bank of America the cash to make another mortgage. Fannie then holds your loan along with millions of others they have bought, and they use the loans as assets to serve as collateral, so they can borrow money in the financial markets to buy more loans from Bank of America and other lenders. What is the impact of all this activity on the cost and availability of mortgages? What if any pitfalls do you see in the process? On balance, is it good or bad for society? Why?