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FICO scores to assess the creditworthiness of individuals include the following except     Credit History     Length of credit history     Education     Amounts owed

FICO scores to assess the creditworthiness of individuals include the following except     Credit History     Length of credit history     Education     Amounts owed

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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QUESTION 3

  1. FICO scores to assess the creditworthiness of individuals include the following except

       

    Credit History
       

    Length of credit history
       

    Education
       

    Amounts owed

     

    QUESTION 4

    1. A bank is in the processing of rescheduling a $10 million loan paying 14% interest.
      If liquidated, it expects to receive $8.4 million. The rescheduling terms are as follows:
      Amount       $10,000,000 in year 0    
      New maturity in years   5      
      Interest rate     8%      
      Principal payments in millions   $5,000,000 each in years 4 and 5
      Upfront-fee     1.00%      
      Cost of capital after rescheduling 14.00%      
                     
      Should the bank reschedule the loan?        
         

      Yes, reschedule the loan because the NPV is greater than liquidation value
         

      No, do not reschedule the loan because the liquidation value is lower than the NPV
         

      Reschedule the loan only if the cost of capital after rescheduling is 12%    
         

      Reschedule the loan only if the cost of capital after rescheduling is 15%    
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