ECON: MACRO4 (with CourseMate, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
4th Edition
ISBN: 9781285423623
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 13, Problem 4.10PA
To determine
Subprime mortgages and their role in financial crisis of 2008.
Concept Introduction:
A subprime mortgage is a type of loan granted to individuals with poor credit scores (640 or less, and often below 600), who, as a result of their deficient credit histories, would not be able to qualify for conventional mortgages. Because subprime borrowers present a higher risk forlenders, subprime mortgages usually charge interest rates above the prime lending rate. The main types of subprime mortgages include fixed-rate mortgage with 40- to 50-year terms, interest only mortgage and adjustable rate mortgages.
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Problem 1.1
Cyber security is a very costly dimension of doing business for many retailers and
their customers who use credit and debit cards. A recent data breach of
U.S.-based Home Depot involved some 56 million cardholders. Just to investigate
and cover the immediate direct costs of this identity theft amounted to an
estimated $62,000,000, of which $27,000,000 was recovered by insurance
company payments. This does not include indirect costs, such as, lost future
business, costs to banks, and cost to replace cards. If a cyber security vendor had
proposed 8 years before the breach that a $10,000,000 investment in a malware
detection system could guard the company's computer and payment systems from
such a breach, would it have kept up with the rate of inflation estimated at 4% per
year?
Not use ai please
Analyze financial banking products from the Asset-Based Financial Products side (like credit cards, loans, mortgages, etc.). Examine aspects such as liquidity, risk, and profitability from a company and an individual point of view.
Ensure that the interventions demonstrate analytical skills and clearly express the points of view regarding the topic.
Chapter 13 Solutions
ECON: MACRO4 (with CourseMate, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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