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2 of Banks tend to never deduct interest at any other time than at the END of the loan. Select one: True False
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- 26) The cash payment or PMT for a Note Payable (installment loan) includes only interest on the loan. TRUE FALSEWhen the maker of a note pays at maturity, the note is said to be dishonored. True false question. True FalseWhich of the following statements is correct? O There is no interest included in a zero-interest-bearing note. O A long-term note's fair value and present value are always the same. O A note is signed by the payee in favour of the maker. O All notes contain an interest element because of the time value of money.
- State whether the following statements are true of false. Statement 1: The conversion of the company’s short-termdebt into a long-term note payable would decrease both workingcapital and the current ratio. Statement 2:A user of financial statements who is a short-termcreditor is interested in the borrower’s ability to pay interestregularly. STATEMENT 1 STATEMENT 2a. True Trueb. True Falsec. False Trued. False FalseTrue or False. 1. Maturity value is the amount collectible on the agreed date of payment. 2. The creditor has no right to authorize anybody to collect from the debtor. 3. A creditor may authorize anybody to accept payment from the debtor on his behalf. 4.1. Explain how an installment loan differs from revolving credit in terms of risk and the nature of the return to the lender.
- 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 collateralPlease 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 SPVCollateral security is used by the lender when * interest is not paid on time the loan is not repaid and prime security is insufficient to cover the dues the loan term is over the interest rates in the market change
- The definitions of default events are fairly standard, but what really constitutes a default? a. The second missed payment O b. Default only happens when you cannot pay the interest on the outstanding debt c. The first missed payment O d. Depends on what kind of grace period is granted and the agreement with the borrowerWhich 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 loanWhich equation would not work to find the fixed rate of simple interest on his loan? a) r= Pt b) 1= Prt c) A = P(I+ rt) d) 1= A- P