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Loan Request: $15,000 for 1 year college tuition Capacity Annual household income: $10,000 salary Years working for current employer: 2 years Education: some college Monthly debt payments: 30% of monthly income Character • FICO score: 550 • Years living at current address: 2 years Criminal record: none Collateral Short-term financial assets: $500 in checking account plus $1,000 in savings Long-term financial assets: . Length of credit history: 1 $5,000 in certificate of year using a major credit card deposit account •> Equity in home: None (renter) Market value of other real assets: Old car ($1,500) 30. Given an individual with the characteristics above, evaluate how likely it is that this person will repay the loan in each of the three categories. Give a rating of "low risk,” “medium risk,” or "high risk." a. Capacity: b. Character: C. Collateral: 31. Which factors support approving this individual's loan request?

Loan Request: $15,000 for 1 year college tuition Capacity Annual household income: $10,000 salary Years working for current employer: 2 years Education: some college Monthly debt payments: 30% of monthly income Character • FICO score: 550 • Years living at current address: 2 years Criminal record: none Collateral Short-term financial assets: $500 in checking account plus $1,000 in savings Long-term financial assets: . Length of credit history: 1 $5,000 in certificate of year using a major credit card deposit account •> Equity in home: None (renter) Market value of other real assets: Old car ($1,500) 30. Given an individual with the characteristics above, evaluate how likely it is that this person will repay the loan in each of the three categories. Give a rating of "low risk,” “medium risk,” or "high risk." a. Capacity: b. Character: C. Collateral: 31. Which factors support approving this individual's loan request?

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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I need help with questions 30 through 34 if possible
Loan Request: $15,000 for 1 year college tuition Capacity Annual household income: $10,000 salary Years working for current employer 2 years Education: some college Monthly debt payments.. 30% of monthly income Character Collateral FICO score: 550 Short-term fnancial assets: $500 in checking account plus $1,000 in savings Long-term financial assets $5,000 in certificate of deposit account Equity in home: None (renter) Market value of other real Years living at current address: 2 years Criminal record: none Length of credit history: 1 year using a major credit card assets: Old car ($1,500) 30. Given an individual with the characteristics above, evaluate how likely it is that this will IS person repay the loan in each of the three categories. Give a rating of "low risk," "medium risk," "high risk." Capacity: b. Character: or a. C. Collateral: 31. Which factors support approving this individual's loan request? 32. Which factors support denving this individual's loan request? 33. Would you approve or deny this person's loan request?
Transcribed Image Text:Loan Request: $15,000 for 1 year college tuition Capacity Annual household income: $10,000 salary Years working for current employer 2 years Education: some college Monthly debt payments.. 30% of monthly income Character Collateral FICO score: 550 Short-term fnancial assets: $500 in checking account plus $1,000 in savings Long-term financial assets $5,000 in certificate of deposit account Equity in home: None (renter) Market value of other real Years living at current address: 2 years Criminal record: none Length of credit history: 1 year using a major credit card assets: Old car ($1,500) 30. Given an individual with the characteristics above, evaluate how likely it is that this will IS person repay the loan in each of the three categories. Give a rating of "low risk," "medium risk," "high risk." Capacity: b. Character: or a. C. Collateral: 31. Which factors support approving this individual's loan request? 32. Which factors support denving this individual's loan request? 33. Would you approve or deny this person's loan request?
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