Question: Question 2. (10 points) A farmer would like to borrow $350,000 to buy a land worth $370,000. a) Calculate the loan-to-value ratio. (2 points) b)

Question 2. (10 points) A farmer would like to borrow $350,000 to buy a land worth $370,000. a) Calculate the loan-to-value ratio. (2 points) b) Considering the evolution of land values over the past years, as well as the loan-to-value ratios used by banks and the limit in bank regulations, answer the following: i. Would you, as the lender, provide this loan? (1 point) If so, explain why? If not, why not and what loan amount would you recommend? (3.5 points) iii. Why does this ratio matter? What are lenders concerned with when deciding on a loan-to-value ratio. (3.5 points)

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