Which of the following describes a subprime mortgage?
A: The rate of interest is less than the prime rate of interest
B: The loan-to-value ratio is below average
C: The life of the mortgage is less than 25 years
D: The credit risk is high
A: The rate of interest is less than the prime rate of interest
B: The loan-to-value ratio is below average
C: The life of the mortgage is less than 25 years
D: The credit risk is high
举一反三
- The covered interest differential is _____ the sum of the forward premium on a currency and the interest rate differential. A: approximately equal to B: more than C: exactly equal to D: less than
- Which of the following is true of mortgage interest rates? A: Mortgage rates are closely tied to Treasury bond rates, but mortgage rates tend to stay below Treasury rates because mortgages are secured with collateral. B: Longer-term mortgages have higher interest rates than shorter-term mortgages. C: Interest rates are higher on mortgage loans on which lenders charge points. D: All of the above are true. E: Only A and B of the above are true.
- The coupon rate of bond is the interest rate specified in the bond, which is equal to the ratio of the annual interest over the value of bond.
- In which of the following situations would you prefer to be making a loan? A: The interest rate is 9 percent and the expected inflation rate is 7 percent. B: The interest rate is 4 percent and the expected inflation rate is 1 percent. C: The interest rate is 13 percent and the expected inflation rate is 15 percent. D: The interest rate is 25 percent and the expected inflation rate is 50 percent.
- Investors will be willing to pay more than the par value for bonds when the market rate of interest is higher than the contract rate of interest. ( )