Loan Request: S15,000 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 Crminal record none Length of credit history 1 year using a major credit card Collateral Short-term financial assets: $500 in checking account plus $1,000 in savings Long-term financial assets $5,000 m certificate of deposit account Equity in home: None (renter) * Market value of other real assets: Old car ($1,500) 30. Giren an ndividual with the characteristics above evaluate how likely it is that this person will repav the loan m each of the three categories Give a rating of "lowW risk "medium risk, or high risk a Capacity: b Character Ĉ CollateraE 31 Which factorS suppert approving this ndividuall's loan request?. 32. Which factors support denying this individual's loan request2| 33. Would you approve or deny this person s loan request? 34. Explain your decision.
Loan Request: S15,000 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 Crminal record none Length of credit history 1 year using a major credit card Collateral Short-term financial assets: $500 in checking account plus $1,000 in savings Long-term financial assets $5,000 m certificate of deposit account Equity in home: None (renter) * Market value of other real assets: Old car ($1,500) 30. Giren an ndividual with the characteristics above evaluate how likely it is that this person will repav the loan m each of the three categories Give a rating of "lowW risk "medium risk, or high risk a Capacity: b Character Ĉ CollateraE 31 Which factorS suppert approving this ndividuall's loan request?. 32. Which factors support denying this individual's loan request2| 33. Would you approve or deny this person s loan request? 34. Explain your decision.
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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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 vears
Education some college
Monthly debt payments 30%
of monthly income.
Character
FICO score 550
Years living at current
address 2 years
Criminal record none
- Length of credit history 1
year using a major credit card
Collateral
Short-term financial assets:
$500 in checking account
plus $1,000 in savings
Long term financial assets
$5,000 m certificate of
deposit account
Equity m home: None
(renter)
Market value of other real
assets: Old car ($1.500)
30 Gren an mdividual with the characteristics above evaluate how ikely it is that this person will
fepay the loan in each of the three categories Give a rating of low risk'medrum risk," or
high risk
Capacity:
Character:
Collateral:
31 Which factors support approving this individual's loan request?
32. Which factors support denying this individual's loan request?
33. Would you approve or deny this person's loan request?
34. Explain your decision.
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