Question

can someone check my answers and tell me number 7. Thank you

1. The amount of security of collateral on a loan and the risk premium on a loan normally are negatively related. True 2. The LTV of an underwater mortgage is less than one. False 3. Payments on a revolving loan replenishes the amount available for future drawdowns. True 4. The difficulty with Altman's Linear Discriminant Model is the attempts to convert quantitative variables to qualitative variables. False 5. LGD on a loan measures the estimated likelihood of a default. False 6. Credit scoring models are advantageous because of their ability to sort borrowers into different default risk classes. True 7. Loan volume-based models measures the level of credit risk to which a financial institution's loan portfolio is exposed. 8. The marginal mortality rate is the probability of a bond or loan defaulting in any given year of the issue. True 9. The greater is the difference between fair market prices and fire-sale asset prices, the less liquid is the depository institution's portfolio of assets. True 10. A financial institution that sells loans without recourse is legally obligation to buy back loans returned by the seller. False

Answer 1

7th is true as it provides the benchmarks to measure the credit risk to which financial institutions loan portfolio is exposed, And 8th one is false as its the charge which is issued by the insurance companies.It is the premium which insurer has to pay to get the insured amount. Remaining answers are correct.