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 ratings
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Which statement best describe subprime loans?
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- Which 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 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.Please answer the following questions what are two types of credit what is a security interest who is the debtor and creditor what happens if the debtor defaults what type of transaction requires a financing statement
- . Accounts receivable financing is the term used to describe which of the following types of loans that involve either the assignment or the factoring of a firm's accounts receivable? A. Secured short-term loan B. Unsecured short-term loan C. Secured long-term loan D. Unsecured long-term loan E. Trust receipt loanVAR models are used banks to assess lenders exposure to default by its borrowing customers Select one: True FalseCredit scoring is a process used to Multiple Choice determine what interest rate to charge a borrower, based on risk considerations. determine the amortization period for a term loan, based on risk considerations. calculate a borrower's return on equity. calculate a borrower's leverage position.
- URGENT How does high interest rate and setting ceiling on loans (limited credit) compensate for the possibility of defaulting?Commercial loan agreements should contain which of the following: a. representations b. fees and charges c. means of repayment d. all of the above In order for the seller of securitized securities to remove the assets (i.e. mortgages) from the balance sheet, the sale must a. have a service agreement b. be overcollateralized c. be without recourse d. be made at a discount (original issue discount) Banks may deny creditworthy borrowers loan requests if a. they are non-corporate entities b. they are on late on paying taxes c. the loan is too risky d. they are individuals Chattel mortgages refer to a. a security agreement using corporate assets b. a security agreement using commercial equipment c. a security agreement using intangible property d. a security agreement using tangible personal propertywhat are two types of credit what is a security interest who is the debtor and creditor what happens if the debtor defaults what type of transaction requires a financing statement
- Which is not a metric used by lenders to measure the overall suitability of a loan: 1) Loan to value ratio 2) Debt service coverage 3) Debt yield. 4) Effective rent per square foot choose 1Which of the following does not relate to credit risks? a. Credit risk is the possibility of losing a lender takes on due to the possibility of a borrower not paying back a loan b. It refers to the risk that a lender may not receive the owed principal and interest c. Credit risk also describes the risk that an insurance company will be able to pay a claim. d. Credit risk is the possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations e. Credit risk describes the risk that a bond issuer may fail to make payment when requestedWhich 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