Pls help ASAP on both How does the loan-to-value ratio of a private mortgage affect the risk and return ofthe investment?Select one:a. A higher loan-to-value ratio increases the return and decreases the risk ofthe investment.b. The loan-to-value ratio has no effect on the risk and return of theinvestment.c. A higher loan-to-value ratio decreases the return but also decreases the riskof the investment.d. A higher loan-to-value ratio increases the return but also increases the riskof the investment. What factors should a brokerage consider when evaluating the credibility of aprivate lender?Select one:a. The lender's gender, education, and financial strength.b. The lender's track record, gender, and age.c. The lender's reputation, track record, and financial strength.d. The lender's political affiliation, age, and social status.

Financial management is a significant part of running any association, whether it's a business,…

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Foundations of Business - Standalone book (MindTap Course List)

4th Edition

ISBN:9781285193946

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Chapter15: Using Management And Accounting Information

Section: Chapter Questions

Problem 5DQ

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. When choosing between long and short term borrowing, which of the following is not usually a relevant consideration for a company? Any costs associated with refinancing, such as arrangement fees and penalties. Likely interest rate movements. Matching the term of the loan with the nature of the assets being financed. The principal agent problem.
Which of the following statements describes the payment amounts over the life of an ARM? A) Payments will remain constant for the life of the loan. B) Payments may go up or down in relation to the index rate. C) Payments may go up or down in relation to the margin rate. D) Payments may go up or down in relation to the equity in the property.
A borrower wants to lower the amount of money they pay in interest over the life of a loan. Which of these tactics is best for decreasing the amount of interest the borrower would pay? making payments small enough to create negative amortization never defaulting on a monthly payment making monthly payments on a non- amortized loan making biweekly payments on an amortized loan
Why might a manager intentionally classify a trading security as an available-for-sale security? Select one: O A. The manager may wish to prevent an increase in value from being reported in shareholders' equity. B. The manager may wish to prevent a decline in value from being reported in shareholders' equity. C. The manager may wish to prevent a decline in value from being reported on the income statement. D. The manager may wish to prevent an increase in value from being reported on the income statement.
Which of the following refers to the rate that bond investors expect to get for investing in a bond?
With the success of your business, you are ready to establish a storefront. However, you do not have the necessary funds to acquire the building and pay the necessary rent. You are considering borrowing a short-term note from a bank for $130,000. Required part B. Research the lending practices of a local bank. Determine the interest rate charged for a $130,000 loan. What collateral does the bank require to secure the loan? Determine your overall payback amount if you were to repay the loan in less than one year. Choose either a payback with periodic payments or all at the end of the loan term and compare the outcomes. After conducting your research, would you consider borrowing the money? What positive and negative outcomes accompany borrowing the money? Instead of borrowing on a short-term note, you are thinking on borrowing $130,000 and signed a 5-year, note payable with a 12% interest rate. Each annual payment is in the amount of $34,920 and payment is due each Dec. 31. What is…
Thrifts invest in mortgages for which of the following reasons? I. Regulatory incentives to remain concentrated in mortgages II. To reduce interest rate risk III. Managerial expertise in mortgages IV. To engage in matched funding O II and III O I and II O II and IV O I and III.
Evaluating the credit quality of debt using traditional measures such as ratings are an example of which type of risk? aLiquidity Risk b.Interest Rate Risk c.Credit Risk d.Market Risk
You have just received a business valuation report that is dated six months ago. Describe the factors that might have changed during the past six months and, therefore, caused the value of the business today to be different from the value six months ago. Which of these changes affect the expected cash flows, and which affect the discount rate that you would use in a discounted cash flow valuation of this company?
What is the main reason lenders pay borrowers' property taxes through a pre-paid escrow account? It prevents a tax lien from being applied to the home. The tax lien would be senior to the mortgage lien. It prevents the borrower from refinancing with another lender because they would lose all of their escrow funds. It allows the lender to earn interest on the pre- paid tax money as itsits in the account. It allows the lender to take advantage of corporate tax deductions.
If a $900,000 30-year fully amortizing fixed rate mortgage loan from City National Bank has an annual interest rate of 6.25% with a monthly payment of $5,541.45, and a $900,000 15-year fully amortizing fixed rate mortgage loan from Wells Fargo Bank has an annual interest rate of 5.25% with a monthly payment of $7,234.90, a borrower should: a. Choose the 30-year fixed rate loan from City National Bank because of the lower monthly payments b. Make a careful analysis of all the terms and conditions of the available loans to determine which loan is better for that borrower under the circumstances, or if another loan or lender should be considered c. Choose a 7-year adjustable rate interest-only loan from PNC Bank instead with a low teaser interest rate of 1.0% for the first loan year d.Choose the 15-year fixed rate loan from Wells Fargo because of the lower interest rate
II. Discuss why the effective interest method to amortize bonds premiums or discounts is preferable to straight line method. Present your views in maximum 200 words.

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