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Document3 - Word 9 Search esign Layout References Mailings Review View Help Acrobat 3 5 Problem 9 [15 points] 1. [5 points] In practice, one of the most important factors to control for credit risk is loan-to-value (LTV) ratio. Is this a good practice? Why? 2. [5 points] Bian, Lin and Liu (2018b) derive the following LTV bias for the Interest-Only (10) mortgage: Theorem 5. The LTV bias of 10 mortgages can be calculated as follows: LTV bias = LTV price-based x 1 - 1-0Bgn 1- LTV price - based 1-059 Bgn 1- 0587 Describe what 1-05 (Ben Ben . , r, and LTV price-based stand for. 3. [5 points] In a depressing market with extremely high time-on-market for real estate sellers, why are transaction prices noisy? ET Focus O mm W 88F Cloudy