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
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
Related questions
Question
I need help with questions 30 through 34 if possible
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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