Which of the following statements is not true about mortgages? O The ending balance of an amortized loan contract will be zero. O Mortgages are examples of amortized loans. O The payment allocated toward principal in an amortized loan is the residual balance-that is, the difference between total payment and the interest due. O Mortgages always have a fixed nominal interest rate.

A Collateralized Mortgage Obligation (CMO) allows you to create some AAA rated tranches from a pool of subprime mortgages by ordering the tranches by payback precedence.   Question 36 options:   True   False

Can you Discuss the Reverse Annuity Mortgage ,(RAM)? and also Identify and explain briefly the types of derivatives in a financial system

Assume you are lending money to company X. A credit default swap (CDS) consists of an agreement by a third party to pay the lost principal and interest of a loan to you (the CDS buyer) if a borrower defaults on a loan. Which of the following is false? O A. A Swap completely solves the problem that company X might default OB. A Swap solves the default problem from Company X on the condition that the third party (CDS provider) will not default. O C. When financial crisis happens, the CDS seller may have to pay recovery to many CDS buyers, and then the CDS seller could default. O D. B and C are part of the reasons for 2008 Global financial crisis.

Explain Reverse Annuity Mortgages (RAMs) loan?

Why are the credit default swaps, in essence, an insurance contract against the default of one or more borrowers?

The maturity value of a note receivable is equal to the sum of the face amount of the note O plus the interest O plus nothing else O none of these answers are correct Ominus the interest

When purchasing a vehicle or obtaining a mortgage, you are most likely to get what kind of loan: O pure discount O interest only amortized loan with fixed payment amortized loan with fixed principal payment

A subprime mortgage is a mortgage given to a borrower with excellent credit. True False

Non-performing loans are defined as loans that: a. are either in default or close to being in default and are at least 90 days in arrears. b. have been written off and loans that are at least 80 days in arrears. c. are either in default or close to being in default and are at least 60 days in arrears. d. have been written off and loans that are at least 60 days in arrears.