Which of the following loan types is likely to have the highest quoted interest rate? Ch12...
Which of the following loan types is likely to have the highest quoted interest rate? Ch12
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a. |
Conventional loan 30 year amortization |
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|
b. |
Interest only floating rate senior loan |
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|
c. |
Fixed rate second lien note |
|
|
d. |
Conventional loan 20 year amortization |
Homework Answers
Fixed rate second lien note is likely to have the highest quoted interest rate because have a lower priority of repayment than loans
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Which of the following loan types is likely to have the
highest quoted interest rate? Ch12...
11) Which of the following is a characteristic of a balloon loan? A) Prior to maturity,...
11) Which of the following is a characteristic of a balloon loan? A) Prior to maturity, the borrower only pays interest (usually monthly). B) The loan is typically 10 - 15 years in maturity. C) At maturity, the entire loan amount is due. D) All of the above are true. E) Only A and C of the above are true. 12) Which of the following protects the mortgage lender's right to sell property if the underlying loan defaults? A) A...
Which of the following has the highest EAR? i) a corporate fixed-income index product with the quoted annual rate of 4.5% with quarterly compounding ii) a mutual fund investment with the quoted annual...
Which of the following has the highest EAR? i) a corporate fixed-income index product with the quoted annual rate of 4.5% with quarterly compounding ii) a mutual fund investment with the quoted annual rate of 5.5% with semi-annual compounding iii) an investment product with EAR of 5.5% A. i B. ii C. iii D. not enough information
Over the life of the loan, which of the following would consistently have a Highest principal...
Over the life of the loan, which of the following would consistently have a Highest principal balance prior to maturity, given each loan had the same term, principle, and interest rate today? a. CAM b. CPM c. GPM d. Can not be determined without specific information. Which of the following is a true statement about ARM? a. ARM is designed to help elder, house-rich and cash-poor borrowers. b. ARM is designed to solve the so-called “title effect” problem for some...
Which of the following bonds offers the highest current yield? a. A(n) 3.24%, 19-year bond quoted...
Which of the following bonds offers the highest current yield? a. A(n) 3.24%, 19-year bond quoted at 44.266. b. A(n) 5.40%, 28-year bond quoted at 73.777. c. A(n) 1.62%, 23-year bond quoted at 22.133. The current yield of the bond in part a is % (Round to two decimal places.) The current yield of the bond in part bis %. (Round to two decimal places.) The current yield of the bond in part c is %. (Round to two decimal...
Which of the following bonds offers the highest current yield? a. A(n) 7.32%, 20-year bond quoted...
Which of the following bonds offers the highest current yield? a. A(n) 7.32%, 20-year bond quoted at 100.885. b. A(n)12.20%, 15-year bond quoted at 168.141. c. A(n) 3.66%, 18-year bond quoted at 50.442.
Loan Amount: $10,000,000.00 Interest Rate: 6-3/4% Amortization:  
Loan Amount: $10,000,000.00 Interest Rate: 6-3/4% Amortization: 30 years Term: 10 years Assume the above loan is interest only for the first three (3) years. What is the Annual Debt Service (ADS) in the first year? How much interest (cumulative) will have been paid at the end of year 3? How much principal will be due at maturity? How much interest will have been paid over the 10 year term?
1. Which of the following will lead to a lower interest rate on a loan? A)...
1. Which of the following will lead to a lower interest rate on a loan? A) lower inflation B) higher opportunity cost C) increased perceived risk of default D) reduced likelihood of borrower paying the loan 2. If you deposit $10,000 in a savings account at an annual interest rate of 7%, how much will you have in the account at the end of three years? A) $8,396 B) $11,800 C) $11,910 D) $12,250.43 3. At an interest rate of...
Which one of the following bonds would be likely to exhibit a greater degree of interest...
Which one of the following bonds would be likely to exhibit a greater degree of interest rate risk? A zero-coupon bond with 20 years until maturity A coupon-paying bond with 20 years until maturity A floating-rate bond with 20 years until maturity A zero-coupon bond with 30 years until maturity
Question 29 (5 points) Which of the following types of loans would most likely have the lowest interest rate? Mort...
Question 29 (5 points) Which of the following types of loans would most likely have the lowest interest rate? Mortgage O Debenture Line of Credit O Credit Derivative Question 30 (5 points) Suppose you own a perpetual bond with a face value of $1,000 and a coupon rate of 3% paying annually. You need some emergency cash and have to sell the bond in the open market. Market interest rates have fallen to 2%. For what price can you sell...
Different types of mortgages: Suppose you are buying a house and have to borrow $200,000 by...
Different types of mortgages: Suppose you are buying a house and have to borrow $200,000 by taking out one of the following mortgages. a) A fixed rate mortgage with 30-year-term and with mortgage rate of 7.5%. What would be the monthly payment? b) An adjustable-rate mortgage with 30-year-term and the initial mortgage rate of 7.5%. However after one year (12 months), the rate will increase to 8.5%. What will be the monthly payment after one year? c) An interest-only and...
Which of the following bonds offers the highest current yield? a. A(n) 3.24%, 19-year bond quoted at 44.266. b. A(n) 5.40%, 28-year bond quoted at 73.777. c. A(n) 1.62%, 23-year bond quoted at 22.133. The current yield of the bond in part a is % (Round to two decimal places.) The current yield of the bond in part bis %. (Round to two decimal places.) The current yield of the bond in part c is %. (Round to two decimal...
1. Which of the following will lead to a lower interest rate on a loan? A) lower inflation B) higher opportunity cost C) increased perceived risk of default D) reduced likelihood of borrower paying the loan 2. If you deposit $10,000 in a savings account at an annual interest rate of 7%, how much will you have in the account at the end of three years? A) $8,396 B) $11,800 C) $11,910 D) $12,250.43 3. At an interest rate of...
Question 29 (5 points) Which of the following types of loans would most likely have the lowest interest rate? Mortgage O Debenture Line of Credit O Credit Derivative Question 30 (5 points) Suppose you own a perpetual bond with a face value of $1,000 and a coupon rate of 3% paying annually. You need some emergency cash and have to sell the bond in the open market. Market interest rates have fallen to 2%. For what price can you sell...
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