Quiz 9: FIN4324 RVC 1218 PDF

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Quiz 9: FIN4324 RVC 1218

11/21/21, 10 :11 PM

Quiz 9 Due Nov 21 at 11:59pm

Points 100

Questions 20

Available Nov 15 at 8am - Nov 21 at 11:59pm 7 days

Time Limit 60 Minutes

Instructions Directions Students will have 60 minutes to complete and submit the quiz. After the 60 minutes have passed, the quiz will auto-submit. Upon submissions, students will be able to view their score. After the quiz has closed, students will be able to view their submitted answers along with their score.

Attempt History LATEST

Attempt

Time

Score

Attempt 1

13 minutes

95 out of 100

! Correct answers are hidden. Score for this quiz: 95 out of 100 Submitted Nov 21 at 10:10pm This attempt took 13 minutes.

Question 1

5 / 5 pts

In order to control the risk exposure on their business loans most banks use both price and credit rationing to regulate the size and composition of their loan portfolios. https://fiu.instructure.com/courses/110676/quizzes/637366

Page 1 of 9

Quiz 9: FIN4324 RVC 1218

11/21/21, 10 :11 PM

True

Question 2

5 / 5 pts

A project loan is granted to several companies jointly sponsoring a large project, and the lender can recover funds from such sponsoring companies, if the project does not pay out as planned. This is known as a project loan granted on a recourse basis.

True

Question 3

5 / 5 pts

Term loans normally are secured by accounts receivable and inventory.

False

Question 4 https://fiu.instructure.com/courses/110676/quizzes/637366

5 / 5 pts Page 2 of 9

Quiz 9: FIN4324 RVC 1218

11/21/21, 10 :11 PM

Liquidity indicators measure a business firm's ability to raise cash in a timely fashion at a reasonable cost.

True

Question 5

5 / 5 pts

Syndicated loans are a type of working capital loan.

False

Question 6

5 / 5 pts

The basic strength of the below-prime market pricing model is that there are narrow margins or markups on loans.

True

https://fiu.instructure.com/courses/110676/quizzes/637366

Page 3 of 9

Quiz 9: FIN4324 RVC 1218

11/21/21, 10 :11 PM

Question 7

5 / 5 pts

The loan-pricing method that takes the whole customer relationship into account when pricing each loan request is known as the cost-benefit loan pricing method.

False

Question 8

5 / 5 pts

Under current federal laws a lender is required to make an environmental site assessment of the borrower's property in order to avoid environmental liability.

False

Question 9

5 / 5 pts

The firm's coverage ratios measure how carefully the firm's management monitor and control its expenses.

https://fiu.instructure.com/courses/110676/quizzes/637366

Page 4 of 9

Quiz 9: FIN4324 RVC 1218

11/21/21, 10 :11 PM

False

Incorrect

Question 10

0 / 5 pts

A bank has a listed prime rate of 7%. They have estimated that the marginal cost of raising funds is 5%, their default risk premium on a loan is 1.5% and that they want a profit margin of 2%. They have also estimated that the term risk premium is .5%. What is the interest rate this bank will charge if they use the price leadership model (and the prime rate as their base rate)?

8.5%

Question 11

5 / 5 pts

Home mortgage real estate loans soared to record levels at the beginning of the 21st century. https://fiu.instructure.com/courses/110676/quizzes/637366

Page 5 of 9

Quiz 9: FIN4324 RVC 1218

11/21/21, 10 :11 PM

True

Question 12

5 / 5 pts

Predatory lending is a practice of granting loans to weaker borrowers and charging them excessive fees and interest rates, increasing their risk of default.

True

Question 13

5 / 5 pts

Points on a home mortgage loan results in a lender earning a higher effective interest rate on the loan than just the loan rate quoted to the borrower.

True

https://fiu.instructure.com/courses/110676/quizzes/637366

Page 6 of 9

Quiz 9: FIN4324 RVC 1218

11/21/21, 10 :11 PM

Question 14

5 / 5 pts

"Pyramiding of debt" refers to borrowing from one lender to repay another lender.

True

Question 15

5 / 5 pts

The "right of offset" allows a bank to auction a customer's property to the highest bidder to recover a loan in default.

False

Question 16

5 / 5 pts

Lenders in the consumer loan field prefer to measure a borrowing customer's income by the amount of take-home pay.

True

https://fiu.instructure.com/courses/110676/quizzes/637366

Page 7 of 9

Quiz 9: FIN4324 RVC 1218

11/21/21, 10 :11 PM

Question 17

5 / 5 pts

The most important factor used in the FICO credit score is the borrower's payment history.

True

Question 18

5 / 5 pts

Finance companies are the most dominant lenders of credit to households in the United States with commercial banks ranked second as consumer lenders.

False

Question 19

https://fiu.instructure.com/courses/110676/quizzes/637366

5 / 5 pts

Page 8 of 9

Quiz 9: FIN4324 RVC 1218

11/21/21, 10 :11 PM

The Truth-in-Lending Act of 1968 gave consumers access to the information from their credit files kept at local and regional credit bureaus.

False

Question 20

5 / 5 pts

Jane Smith has asked for a 30 year mortgage (repayable in monthly installments) to purchase a home in Oklahoma City, Oklahoma. The purchase price of the home is $150,000 of which $125,000 must be borrowed. If the APR on this loan is 8 percent, how much will Jane's total financing charges be?

$205,194

Quiz Score: 95 out of 100 https://fiu.instructure.com/courses/110676/quizzes/637366

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