What motivation encourages commercial banks to make variable rate mortgages? Why are variable rate mortgage rates normally below fixed mortgage rates? As the level of rates declines, would you expect banks to increase or decrease the adjustable rate proportion of their mortgage portfolios?
Answer to relevant QuestionsYou are considering making a working capital loan to a company that manufactures and distributes fad items for convenience and department stores. The loan will be secured by the firm’s inventory and receivables. What risks ...Many banks compete aggressively for business in consumer credit cards. What is the particular attraction of this type of lending? Explain why a large bank may be willing to accept higher average loss rates on loans it is able to credit score. Use the following data to calculate the requested ratios: * Prior- period inventory was 170. a. Current ratio b. Days accounts receivable c. Inventory turnover d. Days accounts payable outstanding e. Debt to equity f. ...Generally, a high current ratio is an indicator of good liquidity. Under what circum-stances or conditions could a high current ratio be an indicator of problems with the company’s current assets?
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