Understanding Business
Understanding Business
12th Edition
ISBN: 9781259929434
Author: William Nickels
Publisher: McGraw-Hill Education
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Svetlana, a mortgage broker, has a client, Noah, who would like to consolidate all
his debts using a second mortgage, since his first mortgage is closed for another
three years. Noah is insistent that he does not pay any more than 10% as a rate of
interest, and Svetlana's investor, Gill, who is interested in funding this mortgage, is
insistent that she earn 13% as a rate of return. Give this scenario which of the
following options would satisfy both Noah and Gill?
Select one:
a. Charge a lender's fee, brokerage fee and administration fee that totals 13%
total cost of borrowing
b. Charge a brokerage fee and pay it to Gill so that he earns at least 13% while
charging Noah 10% interest
c. There is no way to satisfy the needs of both Gill and Noah in this scenario
d. Charge a lender's fee that earns Gill an IRR of 13% while charging 10% as an
interest rate to Noah
4
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Transcribed Image Text:Svetlana, a mortgage broker, has a client, Noah, who would like to consolidate all his debts using a second mortgage, since his first mortgage is closed for another three years. Noah is insistent that he does not pay any more than 10% as a rate of interest, and Svetlana's investor, Gill, who is interested in funding this mortgage, is insistent that she earn 13% as a rate of return. Give this scenario which of the following options would satisfy both Noah and Gill? Select one: a. Charge a lender's fee, brokerage fee and administration fee that totals 13% total cost of borrowing b. Charge a brokerage fee and pay it to Gill so that he earns at least 13% while charging Noah 10% interest c. There is no way to satisfy the needs of both Gill and Noah in this scenario d. Charge a lender's fee that earns Gill an IRR of 13% while charging 10% as an interest rate to Noah 4
Aleksi, a private investor, is considering an investment in an area of northern
Ontario that he has little familiarity with. The applicant is requesting a three-year
term and Aleksi is unsure of what might affect housing prices in that area over the
next three years. He is asking his mortgage broker, jean, if she has any insight into
what may happen with housing prices so that he can make a more informed
decision to lend about the length of the term in that area. Jean has advised Aleksi
to speak to the appraiser. The appraiser has advised Aleksi, that, if the population
is increasing in a specific geographic area, the demand for housing will follow suit.
The makeup of the population will further impact the types of housing in demand.
Younger buyers, for example, may be more likely to purchase smaller starter
homes, such as condos. What was the appraiser referring to?
Select one:
a. Market analysis
b. Demographics
c. Land use regulations
d. Speculation
D
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Transcribed Image Text:Aleksi, a private investor, is considering an investment in an area of northern Ontario that he has little familiarity with. The applicant is requesting a three-year term and Aleksi is unsure of what might affect housing prices in that area over the next three years. He is asking his mortgage broker, jean, if she has any insight into what may happen with housing prices so that he can make a more informed decision to lend about the length of the term in that area. Jean has advised Aleksi to speak to the appraiser. The appraiser has advised Aleksi, that, if the population is increasing in a specific geographic area, the demand for housing will follow suit. The makeup of the population will further impact the types of housing in demand. Younger buyers, for example, may be more likely to purchase smaller starter homes, such as condos. What was the appraiser referring to? Select one: a. Market analysis b. Demographics c. Land use regulations d. Speculation D
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