Which of the following loan types is likely to have the highest quoted interest rate? a....

Which of the following loan types is likely to have the highest quoted interest rate?

	a.	Conventional loan 30 year amortization
	b.	Interest only floating rate senior loan
	c.	Fixed rate second lien note
	d.	Conventional loan 20 year amortization

Solutions

Expert Solution

c. Fixed rate second lien note

Second-lien debt is borrowing that occurs after a first lien is already in place.
These debts have a lower priority of repayment than senior or higher-ranked debt.
Hence interest rates are often higher than on the first lien.

jeff jeffy answered 2 years ago

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