What are the advantages and disadvantages of a fixed principal, fixed interestloan?

Q: Why is the return associated with common stock referred to as a residual claim? Contrast this kind…

A: Common stock holders are the owners of the business. Profits earned by the company will be the…

Q: What does the formula developed for calculating compound interest express?

A: Answer: Compound interest is nothing but interest earned on interest. In case of simple interest…

Q: fair value model for investment property differ from the revaluation model for PPE

A: Fair value model and revaluation model are methods of valuation of non-current assets as per…

Q: What is the Fama-MacBeth Method in asset pricing assumptions?

A: Fama Mac Beth method is kind of regression method used for determining of parameters for like CAPM…

Q: Debt also can be an advantage. How can be a debt can be advantage?

A: Debt Financing:   It is the money borrowed by the business from outside sources. This source of…

Q: In the situation where Ahmad are depositing $1,000 per month in a savings account that pays 6…

A: Payment period is the no. of times money is deposited in a year. compounding period is the no. of…

Q: financial asset at fair value through profit or loss a. a non derivative equity instrument b. all…

A: Solution: The following may be classified as a financial asset at fair value through profit or loss:…

Q: explain whether true or false : The interest rate parity does hold in realty

A: Interest rate parity is an releationship between spot exchange rate and the forward exchane rate…

Q: Which of the following may be measured subsequently at amortized cost? Group of answer choices A…

A: Amortized cost  Amortized cost is referred to as accumulated portion of the cost recorded of fixed…

Q: what do you mean by proceeds in this question? is it only the interest calculated or the matured…

A: In the question, it was asked to calculate " Proceeds from redemption" Redemption means company…

Q: What is meant by a primary market transaction and a secondary market transaction? Give an example

A: Primary market are market where equity or bonds are issued to investors for the first time.So you…

Q: Taxable interest income is active or passive or portfolio ?

A: Active income is an income that is earned by performing a service. Active income includes salaries,…

Q: Which term structure of interest rates property does the expectations theory not support

A: The Expectations Theory of the term structure of interest rates does not support the "Liquidity…

Q: What is the difference between simple and compound interest? Give examples.

A: Simple interest: It is the interest calculated on the principal of the loan and the account holder…

Q: What will be the Simultaneous Effects of Real Market Forces and Interest Rates on Property Values?a

A: There are various factors which affect the long term trends and short term trends in values of…

Q: What is a securitized Bond?

A: When the outstanding bonds are pooled together to form a new category of product and then is traded…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.