When a decision is made to reject the discount and pay on the last day of the loan term, there is a cost associated with forgoing the discount. TRUE OR FALSE?
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10.-
When a decision is made to reject the discount and pay on the last day of the loan term, there is a cost associated with forgoing the discount.
TRUE OR FALSE?
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- 16. What do you call for the likelihood of loss due to customers are not paying their amounts owing? a. Discount risk b. Credit risk c. Payment risk d. Loss risk19. What is the effect of the lender's increasing the loan's interest rate just before closing A. The borrower has to pay it. B. Closing will be delayed. C. The borrower can choose to pay extra points. D. The real estate licensee is expected to pay the extra points.5.-The cost of marginal bad debts is found by taking the difference between the levels of bad debts before and after the proposed relaxation of credit standards. True or false?
- To account for a down payment, adjust the _____ of the loan by subtracting it from the loan amount. O present value (pv) future value (fv) rate O typeThere are two costs associated with extending credit; one is potential lost interest income also known as opportunity cost. What is the other cost?3- Explain briefly demerits of Pay Back Period. One of the demerits of the pay back period method is that it does not consider time value money. Explain with example how discounted pay back period method could sort this shortcoming?
- 1. Modes of extinguishing obligations when creditor abandons his right to collect. (PLEASE EXPLAIN YOUR ANSWER) A. Condonation B. Forfeiture C. Debt D. Damages 2. Fall after the increase reaches a certain variable amount, this is called: (PLEASE EXPLAIN YOUR ANSWER) A. Process factor B. Law of return C. Inflation D. Supply & demand 3. It is always true that the effective rate is greater than the nominal rate when m ≥ 2. (PLEASE EXPLAIN YOUR ANSWER) A. True B. False 4. (A/F, i%, N) = (A/P, i%, N) + i (PLEASE EXPLAIN YOUR ANSWER) A. True B. False4. How can effective APR differ from nominal interest? A. Effective APR takes loan fees into account, while nominal interest does not. B. Effective APR will always be less than the nominal interest rate. C. Effective APR is less accurate than the nominal interest rate. D. Nominal interest takes loan fees into account, while effective APR does not.What factors must be considered when deciding whether to refinance a loan after interest rates have declined?
- What is the indifference point under the net present value? When would there be a discount on a loan? How about a premium? Explain the purpose of the net present value.In the PMT function, what is not true about the rate argument? Group of answer choices It assumes an annual interest rate. It can contain references to fields. It is optional. It reflects the interest charged on a loan.33 .The portion of the selling price paid by the customer at the time of purchase is called ________. a. Mortgage b. Amortization c. Down payment d. Installment loan