Question: Look at the Focus on Ethics box (How Fair Is Check Into Cash) in Chapter 5 of the textbook. These, businesses quote an interest rate

Look at the Focus on Ethics box ("How Fair Is Check Into Cash") in Chapter 5 of the textbook. These, businesses quote an interest rate of 15% to loan customers (most of whom are fairly unsophisticated) and yet the EAR of the loan is close to 400%. Explain the wide discrepancy between these rates. What do you believe is the correct regulatory response to these types of lenders?

Step by Step Solution

★★★★★

3.49 Rating (166 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Hard money loans work out to be more expensive than traditional loans as they are not dependant on ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1019-B-C-F-D-F(1080).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

Shown below are the summarized final accounts of Martel plc for the last two financial years: Summarised statement of comprehensive income for the year ending 31 December Additional information: 1...

Look at the Focus on Ethics box ("How Fair Is Check into Cash") in Chapter 5 of the textbook. These, businesses quote an interest rate of 15% to loan customers (most of whom are fairly...

What do you believe are some potential pitfalls or risks in using a strategic-management approach to decision making?

What do you believe is more important for successfully completing a project the formal project management structure or the culture of the parent organization?

Look at the Focus on Ethics box (How Fair Is Check Into Cash) in Chapter 5 of the textbook. These, businesses quote an interest rate of 15% to loan customers (most of whom are fairly unsophisticated)...

Look at the Focus on Ethics box ("How Fair Is Check Into Cash") in Chapter 5 of the textbook. These, businesses quote an interest rate of 15% to loan customers (most of whom are fairly...

PowerPoint Assignment for BUS 401: Principles of Finance You have been asked by a manager in your organization to put together a training program explaining Net Present Value (NPV) and Future Value...

Case Analysis 1. Compute the yield to maturity of Land'o'Toys' bonds before the purchase announcement and use it to determine the likely current bond rating. (Compare YTM to the table on p. 269)....

Unit Information PEN593 Energy Economics Teaching Period: S2 2022 This guide should be used in conjunction with the Handbook as the official source of information about this unit. Refer to myMurdoch...

Find a third-degree polynomial with real coefficients that has zeros x = 3 and x = = 2 + i and y-intercept (0, -30). Write your answer first in factored form, then in general polynomial form (i.e.,...

1. Carlos was late for an appointment with an important client. In his haste, Carlos did not notice a biker on the road. The biker was traveling in the wrong direction on a one-way street. Carlos hit...

offered $900 today or 1000 in at 6% interest in one year. do i take the offer

Determine the resultant moment of the forces about point A. Solve the problem first by considering each force as a whole, and then by using the principle of moments. Units Used: kN = 103 N Given: F1...

Determine the resultant moment of the two forces about the Oa axis. Express the result as a Cartesian vector. Given: F1 = 80 lb F2 = 50 lb α = 120 deg β = 60 deg γ = 45 deg a = 5 ft...

(Conceptual FrameworkGeneral) The Financial Accounting Standards Board (FASB) has developed a conceptual framework for financial accounting and reporting. The FASB has issued seven Statements of...

Consider the systems shown in figure(a) Determine and sketch their impulse responses h1(n). h2 (n), and h3(n).(b) Is it possible to choose the coefficients of these systems in such away thath1(n) =...

The manometer fluid in Fig P3.157 is mercury. Estimate the volume flow in the tube if the flowing fluid is (a) gasoline and (b) nitrogen, at 20°C and 1 atm. 3in (1) (2 )

How does the buy sell imbalance relate to the ostrich effect?

In an industrial production line, items are inspected periodically for defectives. The following is a sequence of defective items, D, and non defective items. N produced by this production line. Use...

Assuming that the measurements of Exercise 1.14 were recorded in successive rows from left, to right, as they were collected, use the runs test, with n = 0.05, to test the hypothesis that the data...

How largo a sample is required to be 95% confident that, at least 85% of the distribution of measurements is included between the sample extremes?

The Investments Fund sells Class A shares with a front-end load of 8% and Class B shares with 126-1 fees of 0.75% annually as well as back-end load fees that start at 5% and fall by 1% for each full...

Self and Consulting tom prestados $8200 de First Bank el 1 de junio de 2019 y emiti un pagar a cuatro meses con un inters del 6 %. Con base en la informacin, registre los asientos de diario de ajuste...

Travelers pay taxes for flying, car rentals, and hotels. The following data represent the total travel tax for a 3-day business trip in eight randomly selected cities. NOTE: Chicago has the highest...