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- The internal rate of return on a mortgage loan calculated from the lender's perspective is more commonly referred to as the: Multiple Choice O discount point. O effective borrowing cost. Olender's yield. Oloan constant.Which statement best describe subprime loans? a.Loan issued to high-risk borrowers with poor credit ratings b.Loans priced below the prime lending rate c.Loans issued to low-risk borrowers with poor credit ratings d.Loan issued to high-risk borrowers with strong credit ratingsExplain Negative Amortizing, Constant Payment Mortgage (CPM) Loans?
- 1. Explain how an installment loan differs from revolving credit in terms of risk and the nature of the return to the lender.Amortized loans with equal principal repayments will result in less interest being paid over the life of a loan than alternative types of amortized loans. True or FalseWhich of the following situations are likely to result in higher loan defaults? Mortgages are held by originating institutions in their portfolios. Borrowers have higher equity in their homes. Lenders who require documentation of income, liabilities and asset ownership. Borrowers with low credit scores.
- When the default risk is high, ___. the debtor charges high interest the debtor earns more the creditor earns less the creditor charges high interest Please answer immediately thanks :)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 creditWhich of the following are characteristics of consumer closed credit (installment debt)? 1. generally the loan is larger than what is available with revolving credit 2. flexibility in the amount and timing of the debt repayment 3. the loan repayment is often fully amortized 4. the interest rate on a collateralized installment loan is typically lower than the interest rate on unsecured revolving credit 5. if the loan is paid before the grace period, then no interest applies 1 and 2 O 2, 4 and 5 O 1, 3 and 4 O 3 and 4
- Interest prepaid by the buyer, which may be used to reduce the stated interest rate the lender charges, are known as ▼ margins. points. payment caps. variable investments.URGENT How does high interest rate and setting ceiling on loans (limited credit) compensate for the possibility of defaulting?What is the advantage of a variable-interest loan? Protects the borrower from rising interest rates Borrower can capitalize on a reference rate decrease Makes it easier for the borrower to plan for future payments Reduces the total interest payments Which of the following tools is used to analyze the industry attractiveness in the credit application process? PESTEL analysis Management analysis Ratios analysis SWOT analysis