What is the goal of the CRA? How do regulators enforce its provisions?
Answer to relevant QuestionsSubprime loans have higher loss rates than many other types of loans. Explain why lenders offer subprime loans. Describe the characteristics of the typical borrower in a subprime consumer loan. Explain how a direct installment loan differs from an indirect installment loan. Discuss the impact of each of the following on prepayment risk for a mortgage backed pass through security (MBS): a. High coupon interest MBS versus low coupon interest MBS b. MBS issued six years prior versus MBS issued ...Explain why bank managers often refuse to sell securities at a loss relative to book value. What is the cost of continuing to hold discount instruments? What are the costs of selling securities at a gain? You pay federal income taxes at a 28 percent marginal tax rate. You have the choice of buying either a taxable corporate bond paying 7.10 percent coupon interest or a similar maturity and risk municipal bond paying 5.90 ...
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