Which of the following risk is not a determinant of interest rate in mortgage lending?
a. Default risk
b. Liquidity risk
c. Currency exchange risk
d. Interest rate risk.
Since mortgage lending is mostly limited to domestic real estate, so the currency exchange risk does not play a role in this aspect of the business.
Correct answer is : c. Currency exchange risk
Which of the following risk is not a determinant of interest rate in mortgage lending? ...
Bond ratings classify bonds based on: interest rate, inflation rate, and default risk. liquidity, interest rate, and default risk. liquidity, market, and default risk. default risk only. default and liquidity risks.
With a fixed-rate mortgage (FRM), the ___________ bears the interest rate risk and with an Adjustable Rate Mortgage (ARM) the __________ bears the interest rate risk. A. borrower; lender B. lender; lender C. borrower; borrower D. lender; borrower
Financial futures are available to protect against all of the following except: a., interest rate risk, b., level of equity prices, c., currency swap risk, d., exchange rate risk?
Which of the following equations is NOT correct? Quoted rate = quota risk-free rate + default risk premium + liquidity premium + maturity risk premium Quoted interest rate minus real risk-free rate = Inflation premium Maturity risk premium + marketability premium = Nominal rate minus quoted risk-free rate Maturity risk premium + marketability premium + default risk premium = Nominal rate minus quoted risk-free rate You are the chief financial officer (CFO) of a regional bank in New Orleans. As you...
35) In 2002 mortgage rates fell and mortgage lending increased. Which of the following could explain both of these changes? a. b. The demand for loanable funds shifted leftward. C. The supply of loanable funds shifted rightward. d. The supply of loanable funds shifted leftward. The demand for loanable funds shifted rightward
1. Which of the following is NOT a source of financial risk? A. Commodity price fluctuations. B. Equity price fluctuations. C. Exchange rate fluctuations. D. Liquidity fluctuations. E. Interest rate fluctuations
Financial risk forms : • Market value risk • interest rate risk, • exchange prices, • Asset prices price • default risk • Risk of liquidity Non-Financial risk forms: • Business Risk( chances of failure of business) • Operational Risk (misconduct,fraud etc) • Accounting risk (changes in GAAP/IFRS and comparability issues, managed earnings, etc.) • Legal and Regulation risk • Tax risk • environment risk • Strategic risk Elaborate on each of the risk factors with examples
For long-term U.S. government bonds, which risk concerns investors the most? Select one: a. Liquidity risk b. Interest rate risk c. Market risk d. Default risk
A large lending institution issues both adjustable-rate and fixed-rate mortgage loans on residential property, which it classifies into three categories: single-family houses, condominiums, and multi-family dwellings. The following table displays probabilities based on the bank’s long-run lending behavior: Mortgage Choices Single-Family Condo Multi-Family Adjustable-Rate _____ ? .21 .09 Fixed-Rate .1 .09 .11 What is the probability that a randomly selected customer will have a loan with an adjustable-rate or for a multi-family dwelling? Round your answer to 2 decimal places.
The largest risk of corporate bonds is: A) Interest rate risk B) Default risk C) Business risk D) Liquidity risk None of the above V Pro forma financial statements can best be described as financial statements: A) expressed in a foreign currency. B) where the assets are expressed as a percentage of total assets and costs are expressed as a percentage of sales. C) showing projected values for future time periods. D) expressed in real dollars, given a stated base...