What are the major expenses associated with making consumer loans? What is the average size of consumer installment loans at small banks? How does loan size affect loan rates that banks charge on consumer loans?
Answer to relevant QuestionsExamine the credit card loss rates and personal bankruptcy filings in Exhibit 15.4. What might explain the increase in both measures after 1994 in a period when economic growth in the United States was strong and ...Suppose that four college students check their FICO scores and discover the information listed below. Describe how lenders might price loans to the borrowers with lower scores versus the borrowers with higher scores in terms ...Consider a $ 100 million pool of conventional mortgages paying 8 percent interest. Suppose that you create one PO and one IO for this entire pool. Describe what a PO and IO would look like for this mortgage pool. Suppose that a bank’s ALCO reports that the bank is too liability sensitive; that is, earnings will fall more than desired should rates rise. You have been asked to reduce the bank’s earnings sensitivity. What specific ...How did the provisions of Section 939A of the Dodd– Frank Act alter the behavior of banks in managing their investment portfolios?
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