Home mortgage lenders often charge points on a loan in order to avoid exceeding a legal limit on interest rates or to make their rates appear competitive with those of other lenders. As an example, with a two-point loan, the lender would loan only $98 for each $100 borrowed. The borrower would receive only $98 but would have to make payments just as if he or she had received $100. In this way, the lender can make more money while keeping his or her interest rate lower. Suppose that you receive a loan of $260,000 payable at the end each month for 30 years with an interest rate of 9% compounded monthly, but you have been charged three points. What is the effective interest rate on this home mortgage loan?

Cost benefit analysis is a complex approach that considers the cash flows or the value of money over a period of time. True or False

Ronny took out a 7-year mortgage. For 7 years, he paid the lender monthly payments of $950. Then, after 7 years, his last payment comes due at $55,000. What kind of mortgage did Ronny most likely have? a partially amortized loan a wraparound loan an FHA lean a reverse mortgage

A 10% coupon $1,000 par value bond with four years to maturity is currently selling for $900. The bond pays coupon payments on a semiannual basis. If interest rates move in the corporation's favor, the bond will be called for $1,050. What is the bond's yield to maturity? 13.30% 11.65% 10.00% 8.48%

A homebuyer recently obtained a loan to purchase a house. The lender offered a lower interest rate because the loan is secured. Why would a real estate loan be considered a secure loan? О The loan is backed by the property itself. If the borrower defaults on the loan, the lender can sell the property to get their money back. O In order to qualify for a home loan, the borrower must have good credit. Good credit is a form of security for the lender. O All real estate loans are considered unsecure. O Most home loans are long-term loans, which are considered low-risk from the lender's perspective.

When a lender uses a deed of trust to secure real estate financing, the lender normally cannot recover the difference between what the lender is owed for the remaining balance of the loan versus what the lender recovers by retaking the property via a foreclosure and re-selling the property. This difference is known as a:

Is there any bank or financial institution that offers a 4% interest compounded daily on initial investment?  If so, how hard would it be for me to get $100 locked in to set account for a year, If so, how hard would it be for me to get $100 locked in to set account for a year,.

Jerry takes out a mortgage at 5.2%. After a few years, his payment increases and he sees that the interest rate of his mortgage is now 6.1%. Which of these mortgage types does Jerry most likely have? ARM loan home equity loan fixed-rate loan package mortgage

In the financial world, there are many types of complex instruments called derivatives that derive their value from the value of an underlying asset. Consider the following simple derivative. A stocks current price is 80 per share. You purchase a derivative whose value to you becomes known a month from now. Specifically, let P be the price of the stock in a month. If P is between 75 and 85, the derivative is worth nothing to you. If P is less than 75, the derivative results in a loss of 100(75-P) dollars to you. (The factor of 100 is because many derivatives involve 100 shares.) If P is greater than 85, the derivative results in a gain of 100(P-85) dollars to you. Assume that the distribution of the change in the stock price from now to a month from now is normally distributed with mean 1 and standard deviation 8. Let EMV be the expected gain/loss from this derivative. It is a weighted average of all the possible losses and gains, weighted by their likelihoods. (Of course, any loss should be expressed as a negative number. For example, a loss of 1500 should be expressed as -1500.) Unfortunately, this is a difficult probability calculation, but EMV can be estimated by an @RISK simulation. Perform this simulation with at least 1000 iterations. What is your best estimate of EMV?

When Apple introduced its mobile payment system in 2014, the company was looking to leverage the popularity of its iPhone by adding more functionality and convenience for millions of customers. With Apple Pay, iPhone owners and Apple Watch wearers first enter their credit- or debit-card information, which Apple confirms with the banks. Once this information is on file, Apple creates a digital token that will be electronically transmitted to the retailer when an iPhone owner pays for something. To complete a purchase, the customer simply waves the phone or taps it at the checkout, uses the iPhones Touch or Face ID security to activate Apple Pay, and the phone instantly transfers the token as payment. Even though Apple Pay offers consumers the benefits of convenience and security, Apple knew it wouldnt succeed without a large network of retailers, restaurants, and other businesses agreeing to accept its mobile payments. Among the earliest businesses to sign up with Apple was McDonalds, which agreed to honor Apple Pay in its 14,000 U.S. restaurants and drive-through locations. We serve 27 million customers every day. This is a clear and compelling business opportunity for us, explained McDonalds chief information officer. Compared with cash transactions, Apple Pay transactions cost McDonalds a few pennies more to process because of bank fees. Yet the fast-food giant was willing to sign on because it saw competitive advantage and profit potential in wooing iPhone users interested in speedy checkout. Another early business supporter was Walgreens, the nationwide drug-store chain with 85 million customers enrolled in its frequent-buyer rewards program. Walgreens sells snacks, household products, and health and beauty items in addition to health-care products. Not only did Walgreens agree to accept Apple Pay at its checkout counters, but it was also the first U.S. retailer to add its rewards program to Apple Pays easy sign-on system. As a result, Walgreens customers tap twice at the checkout, once to activate the rewards account and display their savings, the second time to process the actual payment. By deciding to honor Apple Pay, Walgreens said it was enabling a simple and convenient customer experience. Several hundred thousand businesses had signed on to participate by the time Apple Pay launched in October 2014. Apples ongoing efforts to increase business participation paid off: Eighteen months later, the network of participating businesses topped 2 million, and major companies like Starbucks, Dominos, and Crate Barrel were preparing to participate. Eyeing international expansion, Apple also initiated talks with banks in China to bring Apple Pay to millions of iPhone users there. Today, Apple Pay is accepted at more than 50 percent of all U.S. retail locations and in many retail stores in twenty countries. Even though more consumers are making more mobile payments year after year, not every U.S. retailer is willing or able to work with Apple Pay. Some arent satisfied with the amount of consumer information that Apple Pay shares with participating merchants. Others would have to upgrade to new checkout technology for Apple Pay. Still others are locked into exclusive mobile payment deals with competing services. Today, mobile payments represent a small fraction of all purchase transactions, dwarfed by cash as well as by credit and debit payments. And Apple Pay faces strong competition from Google, Samsung, and others operating in the mobile-payment market. To remain a leader, Apple will have to keep signing more participating businesses and showing consumers the benefits of paying by iPhone or Apple Watch whenever they make a purchase. Which of the four categories of business markets is Apple Pay best suited for, and why?